A difficult task for Hawaii’s Legislature to pass an updated state budget by May was made no easier Monday, as a state general fund revenue forecast was essentially unchanged.
The Hawaii Council on Revenues during a Monday meeting decided against any significant adjustment to its forecast for the current and next fiscal years based on data and expectations for tourism, the real estate market, interest rates, construction and other factors.
Sticking with the status quo will provide lawmakers no additional funding to help cover several
hundred million dollars in state expenses for Maui wildfire recovery that stunned lawmakers in February and have added an extraordinary challenge to passing an updated budget.
State general fund revenue for the first eight months of the current fiscal year, from July to February, is up 6.3%. That represents a roughly $360 million gain over the same period the year before.
However, the council left its revenue growth forecast for the current fiscal year, which ends June 30, unchanged from 4% agreed upon in January at its previous meeting. The decision largely stemmed from concern that tax collections in April, which ballooned in each of the past two years to over $1 billion, will be lower this year.
“I’m most worried about April,” Carl Bonham, director of the University of Hawaii Economic Research Organization, told his fellow six council members during the meeting.
Council Vice Chair Kristi Maynard, chief financial
officer at Finance Factors Ltd., also said her big concern was the size of April’s tax collections.
“I would agree with Carl that April is the real unknown,” she said during the meeting, where the vote was unanimous.
For the next fiscal year, which begins July 1, the council forecast state general fund revenue growth at 4.8%, which rounded up its 4.75% forecast made in January.
Under the Hawaii Constitution, the Legislature must limit appropriations of general fund revenue based
on the council’s revenue projections.
General fund revenue
is by far the biggest piece of state spending. Other pieces include debt financing and federal funding.
Total general fund revenue last fiscal year was about $9.2 billion; it is projected to grow to almost $9.6 billion this fiscal year and then to $10 billion next fiscal year.
The pending budget bill to update spending for the current and next fiscal year, House Bill 1800, is slated to be sent from the House of Representatives to the Senate on Wednesday with only rough ideas on how much money will be needed to cover state
wildfire expenses.
In a Monday committee report on the bill, the House Finance Committee said more than 10% of the general fund budget, or about $1 billion, may be needed to respond to the Aug. 8 wildfire disaster, which killed at least 101 people and destroyed most of Lahaina.
So the committee added such an appropriation, with $135 million for the state’s share of federal assistance, $77 million for expenses not eligible for federal funding, $65 million for a victims relief fund, $123 million for housing costs, $500 million for other non-
congregate sheltering and $151 million in additional subsidies.
Gov. Josh Green swept together $200 million in December to pay for wildfire expenses during the current fiscal year, but earlier this month requested from lawmakers another $362 million.
The House Finance
Committee said in its report that the governor’s
request was received without enough time or detail needed for proper evaluation as part of advancing an amended HB 1800 to the Senate for consideration.
There has been concern expressed at the Legislature in recent weeks about possibly having to restrict previously appropriated money for operations and capital improvement projects. At the same time, the state has about $1.5 billion in an emergency budget reserve fund and a projected $1 billion general fund cash balance through the end of June.
