Karin Stanton/Hawaii247.com Contributing Editor

When the state Council on Revenues reduced its growth projections late last week, it came as no real surprise to Gov. Linda Lingle.

The council, which is attached to the state Department of Taxation, has forecast a 3 percent decline in state revenues during the fiscal year that ends June 30. Previously, it forecast a 0.5 percent drop.

The revision translates to a loss of $125 million, which means Lingle will have to do more trimming to this year’s state spending. Extended forecasts likely will mean $125 million less in the 2010 budget.

The governor previously proposed dipping into the state’s rainy day fund, department cuts, restrictions on travel and restrictions on new hiring in response to the global and national economic downturn.

“The lower revenue projections reflect the challenges we will face as a state in the next couple of years, and underscore the need for all of us to work together,” Lingle said. 

By law, the state is required to enact a budget and financial plan that does not result in a deficit at the end of the fiscal year, Lingle said.

“In order to meet our legal obligation, my administration and the Legislature are committed to working together to make the difficult but necessary decisions to ensure we have a balanced budget that addresses our state’s critical needs, while also investing in the long-term future,” she said. 

The administration’s budget and finance team is scheduled to meet with legislative leadership, including the chairs of the Senate Ways and Means and House Finance Committees, ahead of the Legislature opening Jan. 21.

Lingle said all options will be reviewed as a new two-year budget is formulated and called for the efforts to cut across party lines. 

“House Finance Chair Marcus Oshiro emphasized the importance of taking on this challenge in a collaborative fashion. He stated simply, ‘we are all in this together,’ Lingle said. “It is this spirit of unity and cooperation that will enable our state to emerge from this economic and fiscal situation stronger and better positioned for a bright future.”

The Council on Revenues reports its forecast to the governor and the Legislature each June 1, Sept. 10, Jan. 10, and March 15. 

— Find out more:
Department of Taxation’s Council of Revenues: www.state.hi.us/tax/a9_1cor.htm