The state economy is growing more slowly than last year, which prompted a panel of experts on Wednesday to scale back slightly on their projection of how much the state will collect in taxes this year.
The state Council on Revenues voted to reduce its projection of growth in state tax collections this year from
5 to 4.2 percent, which means the state may have about
$55 million less to spend than expected this year.
The council is a panel
of economists and other
experts tasked with predicting how much the state will collect in taxes each year. Those projections are a key component of the state budget each year.
Gov. David Ige’s administration projects the state will close the books on this fiscal year on June 30 with a $643 million surplus, so the latest adjustment by the council should not cause any great hardship.
Still, some members of the council cited signs that economic growth in Hawaii appears to be downshifting.
“I think it’s a picture of continued growth, but slowing growth,” said Carl Bonham, economics professor at the University of Hawaii at Manoa.
Marilyn M. Niwao, vice chairwoman of the council, suggested the abrupt decline of U.S. stock markets may prompt consumers to pause or cutback on discretionary spending such as travel.
And Kristi L. Maynard, a council member, said there are signs the local real estate market is slowing along with the local mortgage market.
“There are some signs that things are not going full speed ahead,” she said.
“I think there’s more signs of caution now.”
The council made no adjustments in their projections for the next six years from fiscal year 2020 to 2025, when state tax collections are expected to grow by
4 percent a year.
Ige has proposed a state general treasury budget of nearly $8.2 billion in the year that begins July 1, and more than $8.4 billion the following year. Lawmakers will consider that two-year spending plan and make their own amendments to it when they return to the state Capitol for this year’s 60-day legislative session starting on Jan. 16.
