Thursday, October 30, 2008

Don't be an ostrich for Halloween

At least not when it comes to our state's fiscal condition.

The State Council on Revenues did a rare thing by revising state tax revenue projections for the current fiscal year outside its normal reporting period.

They did so because the House Speaker and Senate President requested the revision given the dramatic and global economic downturn of the past few months. In addition, the state administration is in the process of putting together their state budget plan which they will present to the legislature in December. Better for everyone to be working with the most current projection possible.

The Honolulu Advertiser story is here. The Honolulu Star-Bulletin report is here.

In a nutshell, here are the COR's projections for this fiscal year and the next bi-ennium, and the new ending balances as a result. The old projection is in parentheses. Thank you to House Finance for the information:

FY09 = -0.5% growth (+1%)
FY10 = +3.5% growth (+4.0%)
FY11 = +4.5% growth (+3.9%)

FY09 = -$225.0 million
FY10 = -$728.6 million
FY11 = -$1,103.3 million (or -$1.1 billion)

By fiscal year 2011, the projection is a negative $1.1 billion. The Governor will have to trim this amount from the state budget and financial plan prior to submitting the plan to the legislature in December.

The COR cautioned that the -0.5% may be further revised downward.

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