Hawaii’s Council on Revenues on Tuesday sharply increased its tax revenue forecast for the state to reflect rebounding spending by residents and a growing number of tourists visiting the islands more than a year after the coronavirus pandemic first hit the state.

General fund tax revenue for the fiscal year ending June 30 should rise 5%, compared with the previous 12 months, up from a 2.5% decline the council estimated at its last meeting, in March.

But revenue is still expected to come in below pre-pandemic levels.

Hawaii law requires lawmakers and the governor to base their budgets on the council’s predictions.

Carl Bonham, a University of Hawaii economist on the panel, said May is going to be a good month for revenue, as will June.

He pointed out general excise tax revenues were relatively strong so far this month, compared with pre-pandemic May 2019 figures, even though hotel tax revenues remain much lower because fewer tourists are in the state.

It has been a volatile year for Hawaii tax revenue since a quarantine imposed on travelers prompted a near-complete shutdown of the tourism industry and tight operating restrictions crippled restaurants and retailers.

First, general fund revenue dropped 6.3% in the fiscal year ended June 2020. Early on in the pandemic, the council forecast revenue would sink another 12% in the fiscal year ending next month.

But by two months ago the council’s outlook improved to just a 2.5% drop thanks to several rounds of federal relief spending, supplemental unemployment benefits and a modest revival of tourism.

For the next fiscal year, ending in June 2022, the council estimated general fund tax revenues will increase 3%.