Revenue forecast may hinder rail funding
| • Even deeper Hawaii revenue drop predicted, but quicker rebound |
A reduction in projected state tax revenues for this year could further hamper collections needed to build Honolulu's planned commuter rail system.
As recently as last month city officials were anticipating a more than $500 million shortfall in transit taxes needed to build the 20-mile, $5.3 billon train line from East Kapolei to Ala Moana. That projection, which was initially included in a May 1 dated report to the federal government. City officials have said that report is outdated and will be replaced by a new report that will be released next month.
The shortfall in transit tax collections — which amounted to $27.1 million less in collections in fiscal year 2009, which ended June 30 — could grow larger based on new tax collection forecasts released yesterday.
The state Council on Revenues lowered the forecast growth rate for general fund tax revenues for fiscal 2010 from 0 percent growth to minus 1.5 percent. At its previous meeting in late May, the council reduced the forecast from 0.5 percent growth to 0 percent.
The council yesterday also increased the projection for fiscal year 2011 to 6.5 percent growth — up from 5.6 percent.
Transit tax collections already are falling short of forecasts for the current fiscal year, which began July 1. During the current fiscal year the city was projecting tax collections to average $16.5 million a month, based on a forecast made last November.
However, in July the tax raised just $12.3 million. Those figures along with all other transit tax collection figures in this story account for the 10 percent the state takes off the top to pay for administering the tax.
City Transportation Director Wayne Yoshioka said the city was encouraged by the Council on Revenues' five-year tax revenue forecast, which reflects a positive long-term outlook on Hawai'i's economy.
"The council projects an economic recovery beginning fiscal year 2011 with tax revenues up 6.5 percent," Yoshioka said in a news release. "Tax revenues will continue to rise through fiscal year 2015, according to the council."
