BY JIM DOOLEY – Concerned about spiking oil prices and dropping tourism, Gov. Neil Abercrombie has asked the state Council on Revenues to revisit its recently released forecast on expected tax revenues.
Abercrombie said at a news conference this afternoon that unrest in the Middle East and post-tsunami devastation in Japan may further worsen the already poor economic outlook issued by the Council last week.
The Council downgraded earlier forecasts of a three per cent economic growth in Hawaii, and projected the total state budget deficit to grow to nearly $1 billion over the next two fiscal years.
Now it will almost certainly have to revise those numbers again.
“The Council on Revenues is going to do its best to try to take into account as soon as it can factors that were touched on it the last report they gave us,” Abercrombie said.
Those factors include “what was happening not just in Libya and Egypt and Tunisia, North Africa, but also what has been happening as recently as this weekend in Saudi Arabia,” the governor said.
Shiite Muslims have been protesting discrimination in Saudi Arabia, Yemen, Bahrain and Oman, oil-rich countries ruled by adherents of the Sunni sect of Islam.
Because of earthquake and tsunami-related events in Japan, recent developments “in places like Saudi Arabia maybe didn’t the attention they might otherwise have gotten,” Abercrombie said.
“Social, economic and political dislocation in Japan also has to be taken into account a little more,” he continued.
He said he’s hoping for “little bit more comprehensive and insightful analysis” of expected tax revenues here.
Asked if he is now in favor of raising the state general excise tax, Abercrombie said, “I’m flexible.”
Local damage to public and private property caused by last week’s tsunami strikes in Hawaii has also added to the state’s immediate budget difficulties for the fiscal year ending June 30, Abercrombie acknowledged.
The administration has estimated damages to be in the “tens of millions of dollars” and Abercrombie issued an emergency proclamation Friday to seek financial assistance from the Federal Emergency Management Agency.
Abercrombie separately announced a new initiative to overhaul state government’s computer and information technology systems.
With $3 million in private money, the state will hire and staff a new Office of Information and Management Technology to study and then revamp its electronic information storage and retrieval systems, the governor said.
The office will be headed by a Chief Information Officer who will answer to the governor.
Funding comes from the Omidyar Ohana Fund, founded by billionaire Hawaii resident Pierre Omidyar. The money will be given to the Research Corporation of the University of Hawaii which will partner with the non-profit Hawaii Community Foundation to help finance the initiative.
State agencies and departments now use a bewildering array of different computer systems which frequently are incompatible with each other.
Other states, notably Utah and Alabama, have centralized their information management systems to save millions of dollars and improve services to citizens, Abercrombie said.
Job applicant information can be found at https://bit.ly/RCUHOIMT.
More information on the initiative is available at https://hawaii.gov/oimt