After a more than hour-long battle yesterday, and nearly a tied vote, the Council on Revenues revised its economic outlook from 14.5 percent downward to 11.5 percent.
The group of nine accountants and economists issue predictions about the state’s economic future quarterly so the governor and legislature can determine the state budget.
Some of the members considered even the 11.5 percent growth outlook too high.
Marilyn Niwao, an accountant, said she believed the growth rate would be closer to 9.5 percent to 9.7 percent and others agreed.
Niwao said several businesses have drained their assets over the last couple of years to survive these tough economic times and are on the verge of closing.
While she agreed some sectors of the economy – such as tourism – are growing, others continue to struggle and don’t see any relief coming soon.
Council on Revenue members include Richard F. Kahle Jr., chair; Jack P. Suyderhoud PhD, vice chair; and members Avery K. Aoki, Carl S. Bonham PhD, Christopher Grandy PhD., Ronald Migita, Marilyn Niwao, J.D. CPA.
Their decision impacts the taxpayers. Kalbert Young, the governor’s director of Budget and Finance, told the Hawaii State Legislature earlier this week “Anything south of 13 (percent)” would cause serious problems for the state.
The downgraded economic outlook represents a reduction of $130 million in revenues, which lawmakers will have to take into consideration in passing the final supplemental budget this session for FY 2012 and 2013.
Traditionally the budget is one of the last bills passed in the 60 day legislative session (which runs from January through May), so lawmakers won’t take any final action until the Council on Revenues meets again March 5.
Young was testifying before the House and Senate money committees, presenting new general fund requests from Gov. Neil Abercrombie’s administration total nearly $120 million. He said some $85.2 million would be offset in expected savings, bringing the net total to $34.7 million.
Young said his department had pared down some $400 million in supplemental budget requests from all departments in the executive branch to the $119 million figure presented to the Legislature.
And the state wants to spend an extra $300 million on capital improvements projects, Young said, saying this request was already lowered from $750 million.
The Hawaii State Legislature opens on Wednesday, January 18, 2012, but members of the finance committees have been meeting ahead of time to hear budget requests from state agency directors.