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UPDATED 3/18/11 2:48 p.m.

While Gov. Neil Abercrombie says he’s asked the Council on Revenues to re-evaluate its forecast to factor in the impact of the disaster in Japan and more unrest in the Middle East, the council’s chairman said he hasn’t heard from the governor’s office.

“I have not seen a request,” Paul Brewbaker, the council’s chairman, told Civil Beat Thursday afternoon.

Brewbaker said the earliest the council’s members — who are volunteers — could meet would be Wednesday, April 13. That would be about a month before the council’s next scheduled meeting on May 26.

“If we were going to have another meeting, which I’m sure I’ll be receiving a request about from what others are saying, the first time we can arrange a quorum of members is April 13,” said Brewbaker, principal of TZ Economics.

On Wednesday, Abercrombie told reporters that his administration is working with the Council on Revenues to get a revised forecast.

“I can’t give you a date as to when we’re going to get it because we want to make sure that it’s not just something that’s time-sensitive but data-shy,” Abercrombie said. “The Council on Revenues is going to do its best to try and take into account as soon as it can factors that were touched on in the last report that they gave us, but that they couldn’t by definition of time elaborate on further what was happening not just in Lybia and Egypt and Tunisia … but also what has happened as recently as this weekend in Saudi Arabia.”

Later Wednesday evening, Abercrombie’s office released a statement that said, in part: “Due to recent global events including the recent earthquake and tsunami in Japan, the Governor is requesting the (Council on Revenues) to reconvene to consider revising their projections so that lawmakers have the best and most current estimates.”

Updated: On Friday, Abercrombie’s office forwarded Civil Beat a copy of a letter dated March 17 to Brewbaker, asking the council to “reconvene as soon as possible in order to take into account recent events that will have a profound impact on the state’s economy.”

The council meets quarterly. At its most recent meeting on March 10, the group lowered its revenue projections for the current fiscal year just hours before the Japanese earthquake that triggered a tsunami warning for the islands.

That adjustment alone caused the state’s deficit to swell to almost $1 billion for the current year through fiscal 2013, without factoring in any effects the Hawaii economy could see from rising oil prices and a slowdown in Japanese travelers.

Brewbaker submitted a on the council’s lowered projections dated March 15. In it, he recognized some of the world events Abercrombie mentioned and warned that similar “external shocks” have negatively impacted Hawaii revenues in recent decades.

“Events since the council’s meeting are a reminder that revenue forecasts should be interpreted with the understanding that exogenous economic shocks have the ability to quickly change outcomes significantly from forecast outcomes,” . “At its March 10 meeting, some members commented that the confidence interval one ordinarily should assign to the council’s forecast may be wider now than under normal circumstances because of the unusual amount of uncertainty associated with last year’s refund delays. In addition, geopolitical turbulence across North Africa since the Council’s previous meeting, during which time autocratic regimes in Tunisia and Egypt had been overthrown and in Libya remained in conflict, had raised the price of crude petroleum from around $85 per barrel to more than $100 per barrel.

“In this context, consequences of seismic events near Sendai in Northeastern Japan shortly after the council’s meeting will have to be monitored closely for signs of macroeconomic impacts on the Hawaii economy,” the report said. “While history teaches us not to overreact in the immediate aftermath of such shocks, especially while humanitarian concerns are paramount, external shocks to Hawaii altered the forecast in recent decades. Those with impacts that rise to the magnitude of Operation Desert Storm in 1991, the 1995 Kobe earthquake, and the 9/11 terror attacks in 2001, along with biological events such as SARS in 2003 and the H1N1-A virus in 2009, can have materially adverse consequences for the Hawaii economy. State revenue impacts should be contemplated in coming weeks, as seismic and economic aftershocks come into better focus.
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