Council on Revenues forecasts jump in Hawaiʻi tax revenue
The state Council on Revenues more than doubled its forecast for Hawaiʻi's general fund tax revenue for this fiscal year.
The council now expected that revenue to increase by 15% for the fiscal year ending in June.
That’s up from its September forecast, where it predicted 6.3% growth.
The state Department of Taxation reported $4.1 billion in general fund tax revenue so far this fiscal year — $900 million more than the same period last year, or an increase of 27%.
Council members said previous forecasts predicted fewer visitors during the pandemic. Assumptions on travelers have changed, and rising inflation should also raise tax revenue.
Members Wendell Lee and Jack Suyderhoud did not vote for the 15% increase because they believed growth will be even higher.
“With the higher inflation, it makes sense that we can go higher," Lee said. His model predicted 16.4% growth. "I've been just flabbergasted by the visitors just keep coming. And when you talk to many of my friends who have made it back home, in their minds, COVID has done, it’s pau. They're moving on they're living on and they're just flabbergasted. Hawaiʻi is so behind and they're going to just keep coming until the world opens up. And so, that's not going to be for another year or so. And so I think we're gonna see a big increase.”
While the general fund increase of 15% may seem high, it is not unprecedented. The tax department noted that general fund tax revenue in fiscal year 2012 was 15%.
The council also adjusted its forecast for fiscal year 2023 to 6.9% – up from its previous estimate of 4%.
State of Hawaiʻi Department of Taxation presentation to the Council on Revenues, Jan. 6, 2022.