Gov. Neil Abercrombie approves of the Council of Revenues forecast revisions for FY14 and FY15, which are consistent with the Abercrombie Administration analysis of the overall economy.
The tourism economic sector is performing strongly, state unemployment rates continue to decline, and other sectors such as construction are showing signs of improvement.
“I am pleased the Council of Revenues is taking a long-term view of our economic future, which coincides with our financial plan – working responsibly toward a stable fiscal growth,” Abercrombie said. “The budget proposal that we submitted to the Legislature is mindful of the revisions of the Council. The rate of revenue growth that they continue to forecast in the current year makes sense and is still very strong.”
The Council also recognized this administration’s efforts to clarify the renewable energy tax credits, thereby preserving a stable and responsible level of state revenue growth.
The administration is concerned that revenue and economic growth are projected to flatten beginning FY16, which will affect future fiscal bienniums and budgets. We will need to address the potential impact of remaining federal issues regarding debt ceilings and sequestration among others.
“The administration believes that the impact could be significant and that’s why we are making plans and working closely with the Legislature,” said Kalbert Young, director of the Budget and Finance Department. “This would include possible cost-saving measures and revenue enhancements such as making permanent certain tax provisions that are due to sunset in 2015 and beyond.”