State revenue forecast still sees 2.5% decline
The state Council on Revenues today kept the state's revenue forecast for the current fiscal year at a 2.5 percent decline, a relief for Gov. Linda Lingle, who would have had to find additional funds to close the deficit if the forecast was lowered.
But the council reduced the forecast for the fiscal year that begins July 1 to 6 percent growth, down from 7.6 percent growth. The adjustment represents a $48 million loss for the state.
State lawmakers will have to find the new revenue in the budget they are considering this session, either through revenue-generating methods such as tax increases or additional spending cuts to state programs.
Before the new forecast, the state had been predicting a $1.2 billion budget deficit through June 2011.
The council's predictions are used by the governor and state lawmakers when drafting the state budget.
The council cautioned, however, that the forecast does not account for Lingle's decision to defer paying $275 million in state income tax refunds until the next fiscal year.
Lingle put off the tax refunds so the state could get through the current year without a deficit. State lawmakers would have to either account for the tax refunds in the state budget for the next fiscal year, change the law to require when tax refunds are paid, or wait for the next governor elected in November to address the issue.