Categorized | Business

Council on Revenues forecast; Abercrombie statement

MEDIA RELEASE

The Council on Revenues (COR) Tuesday projected a lower economic forecast for the current and upcoming fiscal years.

The state Council on Revenues issued its quarterly general fund forecast, which includes revenue growth of 14.5 percent in the fiscal year that ends June 30, 2012, up from 11 percent the council predicted in July.

In addition, revenues in the next fiscal year are expected to climb 6.5 percent, up from 6 percent in the earlier forecast.

The increases are the result of temporary tax law changes, which were predicted to bring in more than $300 million.

Those changes include: a cap on hotel room tax distribution to state agencies and the counties; an increase in the rental vehicle surcharge; and suspension of general excise tax exemptions on some business activities. The changes are set to expire after two years.

Gov. Neil Abercrombie acknowledged the economic challenges but remains confident the Council’s actions can be accommodated under the state’s current financial plan and released the following statement:

“The continued uncertainty in the economy, as reflected in today’s outlook from the Council on Revenues – and recent forecasts from the University of Hawaii Economic Research Organization and state Department of Business, Economic Development, and Tourism – underscores federal government instability and concerns about the strength of foreign economies.

“My Administration has put in place strategic plans that account for necessary revenue adjustments.

“Hawaii needs to continue sound fiscal policies that will enable economic growth that addresses our financial challenges, cares for our environment, invests in people, and creates the good jobs that will keep future generations here in Hawaii.

“We need to continue forging ahead with our administration’s plan to spark immediate job growth through public works projects; build a sustainable economy in Hawaii including in clean energy, food security and broadband; and carefully manage our tax dollars.”

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