Hawaii’s state government is facing a $2.3 billion loss in revenue over the next two fiscal years as it prepares to invite trans-Pacific travelers back to the islands Aug. 1.
The “looming financial crisis” as described by Gov. David Ige includes a 25% drop in tax collections — $483 million in June from $644 million in the year-earlier period. What’s more, the state is expected to collect $6.5 billion in the current fiscal year ending June 30, 2021, 7% less than the $7 billion last fiscal year, Ige said Monday at a COVID-19 briefing at the state Capitol.
“This is especially bad because as you remember, things were looking great for most of the year before the COVID-19 crisis. We went from what looked like a record year to a significant loss because of the virus,” Ige said.
The Council on Revenues revised downward its estimate of state tax collections by $2.3 billion for fiscal years 2020-21, prompting the state to make hard decisions on what to cut to make up for the shortfall.
“For that big of a loss, we are looking at all of our options. Everything is on the table,” Ige said. “This includes trying to find more money and, unfortunately, considering potential cuts.”
With more than 200,000 jobless residents and $4 billion in federal funds used to buoy local businesses drying up at the end of June, the state is facing a “challenging future,” Ige said.
The Payroll Protection Program helped thousands of small businesses continue to employ their workers, while the jobless who received unemployment got an additional $600 per week from the federal government, but that ends in July.
Meanwhile, officials might reinstate restrictions on activities such as gatherings and places where people congregate in large numbers following a recent spike in coronavirus cases.
The governor is considering “targeted rollbacks” in areas where there’s an opportunity to spread the virus, including bars and gyms, which saw a recent cluster of COVID- 19 cases.
“We are looking at those activities that have created these clusters. We do see a lot of transmissions in bars,” Ige said. “The mayors and I are discussing whether it makes sense to continue to allow them to operate under the conditions imposed or should we be pulling back on that. We know going to a stay-at-home order will be very impactful. We do know that social gatherings are adding to the case count.”
The state doesn’t have any “explicitly defined” threshold on what would constitute increasing restrictions or potentially delay the Aug. 1 lifting of the 14-day quarantine for out-of-state tourists who test negative for COVID-19.
“The mayors and public has asked for specific numbers and conditions that would trigger a reaction to ensure the health and safety of our community,” Ige said. “We certainly will be looking at that over the next few days and talking about that and seeing if we can get an objective measure of activity we would feel comfortable publishing as criteria that would encourage us to slow down the economy and potentially walk back if necessary.”
There were seven new coronavirus cases reported Monday as the statewide number of infections since the start of the outbreak rose to 1,030. An estimated 230 infections in Hawaii are active cases, with 781 patients now considered recovered. The state’s COVID-19 death toll remains at 19.
Of all the confirmed Hawaii cases since the start of the outbreak, 115 have required hospitalizations, including 32 since the start of June. Only three COVID-19 patients are currently hospitalized, and two are on ventilators, Lt. Gov. Josh Green told the Honolulu Star-Advertiser. Of the 85,673 coronavirus tests conducted so far by state and clinical laboratories in Hawaii, 1.2% have been positive.
“I’m just worried about people’s ability to pay for their food, housing, health care and their children’s education,” Green said. “That’s why we’re focused on people’s jobs in addition to their health. We’ll only open if we can do it as safely as possible.”