Categorized | Business

Council on Revenues lowers forecast: state in a $1.3B hole

Karin Stanton | Hawaii 24/7 Editor

The state Council on Revenues reported Tuesday it has lowered its forecast for the year, now predicting a 1.6 percent decline in revenues.

Earlier this month, the council forecast 0.5 percent growth, but reconsidered after a dip in last month’s tax collections.

Tuesday’s revision means the state budget deficit now hovers around $200 million for this fiscal year and has jumped to $1.3 billion through fiscal year 2013.

Gov. Neil Abercrombie asked the council to return for a special meeting to update its forecast after the Japan earthquake and tsunami, Middle East unrest and the probable loss of federal funds.

The Council is next scheduled to meet in June.

Later Tuesday, Abercrombie released the following statement regarding the updated Council on Revenues projections:

“Our administration has put forward a plan that will get us out of the immediate fiscal shortfall while moving Hawaii toward a New Day. We understand the challenges facing the state and we are being conservative as we work with the State Legislature to pass a budget that will get the job done.

“To meet the immediate shortfall over the next three months, we will enforce a 10 percent spending reduction for all departments. We will also use the Rainy Day, Hurricane Relief and special funds.

“For future years, the plan we put forward in February still stands. Our plan will add $1.3 billion to Hawaii’s economy–creating jobs and building critical infrastructure like schools, clean energy projects, and public facilities. Our plan restores critical government functions to help local businesses and invest in education. The plan balances the budget by making changes to the tax code, labor savings, and spending cuts.

“The people will not tolerate the status quo. They want jobs, better schools, energy and food produced here.”

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