Hawaii lawmakers and Gov. Josh Green’s administration shouldn’t expect a rise or fall in tax revenue flowing into the state’s general fund next fiscal year compared with a projection made four months ago.

The state Council on Revenues on Thursday issued a forecast for such revenue, about $10.4 billion for the fiscal year beginning July 1, unchanged from the assessment the seven-member panel made in September.

The new forecast limits how much spending lawmakers and the governor can include in their budget plans, and is largely based on the council’s expectations for Hawaii’s economy.

A steady outlook isn’t bad, given much expectation for a coming U.S. recession and the recent spike in interest rates, which affect tourism, construction, home sales and other elements of the local economy amid easing inflation.

“I don’t feel like the outlook has changed very much,” Carl Bonham, a council member and executive director of the University of Hawaii Economic Research Organization,” said during the meeting. Fellow council member Wendell Lee said, “There are a lot of positives,” adding, “I remain optimistic.”

For the current fiscal year, which ends June 30, Hawaii general fund tax revenue through December has been stronger than the council previously expected: up nearly 10% over the first half of the prior fiscal year. This led council members to substantially increase their revenue forecast for the current fiscal year.

“We had very strong collections year-to-date,” council member Kristi Maynard said at the meeting, where updated growth forecasts for this fiscal year and the next one were made unanimously.

The council previously forecast 6.5% revenue growth for the current fiscal year. The updated growth forecast for this fiscal year equates to 9.1%.

On paper, however, the updated growth forecast for the current fiscal year is 5.5% because the council had to factor the loss of $335 million in tax revenue that got paid in recent months to Hawaii households as special tax rebates granted in 2022 by the Legislature and then-Gov. David Ige.

The state Department of Taxation previously expected to account for the tax rebate expense in a different way, so the council in September did not factor it as a revenue loss.

In any case, if more tax revenue actually does flow into the general fund this fiscal year than previously expected, a bigger surplus will be left at the beginning of the next fiscal year and could lead to more proposed spending, tax rebates or both from lawmakers and Green.

Because of the accounting correction with the recent tax rebate expense, the council’s projected growth rate for general fund tax revenue next fiscal year rose to 5%, compared with 4% forecast in September. Still, the amount of revenue projected remains unchanged at roughly $10.4 billion because the tax rebate cost was subtracted from the expected revenue total at the end of this fiscal year.