The Abercrombie administration is restricting discretionary spending by state departments by 10 percent, or about $14 million, as a precautionary step until the economy has shown measurable signs of improvement, the state budget director said.

As of July 1, the start of the new fiscal year, departments received 90 percent of their general fund budgets for the first quarter of the year, Budget Director Kalbert Young said Wednesday. The remaining 10 percent could be restored in the coming months if actual tax collections meet the most recent forecast set by the state Council on Revenues.

In May, the Council reduced the forecast for the fiscal year that ended Monday to minus 0.4 percent, down from zero percent in its prior prediction. State House budget analysts estimate that the lower forecast would cost about $21.9 million and also drop the revenue base going forward.

Despite the sluggish end to fiscal year 2014, the council forecast 5.5 percent revenue growth for fiscal year 2015, which began Tuesday.

"That’s a pretty large increase, which I’m actually rather bullish on," Young said. "I do believe revenues will be greater in fiscal year ’15 than they were in ’14, but I want to see that materialize.

"So until I see that level of revenue growth actually materializing and the council forecasts moving into what is actualized versus just forecasted, I’m basically instituting some level of control and constrainment on the execution of the budget," Young said.

The supplemental budget approved by the Legislature allocates $12.1 billion in fiscal year 2015, down from the $12.3 billion Gov. Neil Abercrombie had requested. The general fund portion of the budget is $6.1 billion, down from the $6.3 billion the governor had sought.

Similar budget measures have been enacted in the past, although restrictions were only 5 percent at the start of last fiscal year.

Despite the precautionary steps, Young said he remains optimistic and that he believes the state’s economy is "still very strong."

"I actually am expecting to see revenues increase at least to the level that the council is forecasting," he said. "But considering where revenues were forecasted for fiscal year ’14, I need to see that materialize before we start just spending according to what the Legislature appropriated."

Discretionary spending primarily covers departmental expenses such as travel, equipment and supplies, but also expansion of programs. It does not include money for salaries or other mandatory budget items.