POSTED: 1:30 a.m. HST, Mar 24, 2011
The state Council on Revenues plans to hold a special meeting Tuesday to revisit its general fund forecast after this month’s magnitude-9.0 earthquake in Japan that is expected to have a drastic impact on state tourism.
In its last forecast, on March 10, the Council lowered its revenue projection after economists determined the economy would not recover quickly enough in the remaining months of the fiscal year to reach its December projection of
3 percent revenue growth. The recalculation — down to 0.5 percent growth — would push the state’s projected budget deficit to nearly $1 billion.
The forecast was made hours before the earthquake struck Japan, resulting in a massive tsunami and the current nuclear crisis facing the state’s core visitor market.
Gov. Neil Abercrombie asked the Council to revisit the forecast in light of the potential impact the disasters could have on Hawaii tourism.
The Council, which meets on a quarterly basis, sets the revenue base used by state lawmakers in crafting the state’s two-year budget. The House has passed its version of the budget to the Senate, which now must look for ways to make up the burgeoning deficit.
Senate leaders are looking at a broad range of revenue-generating proposals and program cuts and say a general excise tax increase remains an option for balancing the budget.