Abercrombie: Special Session Unlikely, Revenues Forecast Unchanged
UPDATED 5/26/11 5 p.m.
Hawaii Gov. Neil Abercrombie says he has no plans to call for a special session following Thursday’s unchanged revenue forecast from the Council on Revenues.
At its quarterly meeting, the group voted not to alter its general fund forecast for the year ending June 30, keeping its earlier prediction of negative 1.6 percent growth. The council also maintained its forecast of 11 percent growth in fiscal 2013.
“Much of the news has been positive — oil prices dropping, reduction in gasoline prices,” council member Carl Bonham said. “Japanese (visitor) counts are coming in at about where we thought.”
Abercrombie said in a prepared statement that he will keep working with the budget approved by lawmakers. House Bill 200 awaits the governor’s signature.
State budget director Kalbert Young said the state took a prudent approach to the operating budget, assuming a negative 2 percent growth for the current year.
“If the trajectory going forward stays on this track, the budget is currently sized for the council’s projection,” Young, director of the Department of Budget and Finance, told Civil Beat. “It should give stability to the budget planning and execution process.”
If the minus 1.6 percent growth pans out, it will result in a $4.29 billion general fund balance for the 2011 budget year, which ends June 30. That’s about $70 million shy of the fiscal 2010 balance.
Using that revenue estimate, the state faces an approximately $1.2 billion deficit, including a $200 million shortfall for the remaining month of the fiscal year.
Lawmakers earlier this month passed allowing Gov. Neil Abercrombie to take up to $42 million out of the Hurricane Relief Fund to cover the current year’s deficit.
And they approved about $688.6 million in new tax revenue to help pay for the 2012 and 2013 operating budgets.
Had the council made significant changes, it could have forced the state to further cut government spending, scramble for more revenue, and possibly spur a special legislative session.
Through the first 10 months of the fiscal year, the state Tax Department said tax collections are 2.3 percent below what they were during the same period last year.
Council chairman Paul Brewbaker said the group is not being optimistic.
“It’s just math — if you take $300 million in refunds and deliver them after a fiscal year ends, then it screws up the numbers for two years,” Brewbaker said.
All seven current council members terms are set to expire June 30.
