The state is expected to have about $110 million less in tax revenue for the fiscal year after a downward revision in the latest forecast by the state Council on Revenues.

The panel of economists, which sets the forecast used by lawmakers and the governor when drafting the budget, on Thursday forecast revenue growth of 3.5 percent in the 2015 fiscal year, down from its 5.5 percent expectation in May.

Council Chairman Kurt Kawafuchi said members remain optimistic about tax revenues in the coming fiscal year, but downgraded the forecast based on a projected leveling off of tourism and a smaller-than-expected impact from new construction projects.

"We just haven’t seen as much bite, or juice, that’s being added by all of the pending construction," Kawafuchi said Friday. "We do see some juice, but maybe not as strong as we had previously estimated."

The council set growth rates of 5.5 percent for each of the remaining five years of the projected six-year forecast.

Marilyn Niwao, the council’s vice chairwoman, said the forecast takes into account external factors that could potentially slow the state’s overall economy.

She cited geopolitical events such as the Russian invasion of Ukraine, increased tension with Islamic extremists in Iraq and Syria, a potential Ebola outbreak spreading from Africa and economic recessions in Japan and China leading to increased worry over a global event that could impact Hawaii like the Sept. 11, 2001, terrorist attacks.

"As far as when something will happen, I guess there’s no way to predict it," Niwao said. "But because of that, I think it’s prudent to factor in some kind of risk factor on the core revenue forecast."

Kalbert Young, state budget director, called the forecast "pessimistic," saying it is inconsistent with recent revenue projections so far this fiscal year, which began July 1.

Revenue collections for July alone were up 13 percent from the same month a year ago, he said.

"Lowering the forecast from what it was previously … doesn’t really make sense for FY15," Young said. "That being said, we do have to consider the council’s forecast in terms of budget execution and budget construction, so I’ll have to weigh their pessimistic look on overall tax growth as we move forward in the current fiscal year."

He said the downgraded forecast could prove challenging for the next administration, which would have to submit the next biennium budget to the Legislature in December.

State departments are expected to soon begin crafting budgets for the next two-year budget cycle, giving the new administration a head start on the process.

"Obviously, this current forecast is going to be the basis for what that budget is going to look like," Young said. "Considering that it’s going to be up to the next administration to formulate a budget for the biennium, it’s going to put some pressures in terms of what that budget is going to look like."