Can Legalized Gaming Fill Hawaii's Budget Hole?

At its most recent meeting, the State Council on Revenues downgraded its outlook for Hawaii’s economy by dropping its forecast of economic growth from 6.7% to 5.2% for the current fiscal year.

Although the overall growth rate in general fund tax revenues was pegged at 14.5%, 4.3 points are attributable to the catch up of the delay in state income tax refunds from two years ago and 5 points are attributed to the changes in state tax laws that are expected to produce about $200 million less in new revenues than the legislature had counted on when drawing up its financial plan for the fiscal biennium.

These latter tax law changes are good only for the current and next fiscal year and, therefore, added revenues from that source will disappear in fiscal year 2014.