Hawaii’s tax revenue falls slightly in last fiscal year, giving policy makers a mixed message

Hawaii’s tax revenue slips in recent fiscal year

HONOLULU — Hawaii’s tax revenue took a slight dip in the fiscal year that recently ended, giving state officials mixed signals about the robustness of the state’s economic recovery.

According to the Department of Taxation, individual income tax collections rose 14.5 percent in the fiscal year that ended June 30, compared with the same period a year earlier. Similarly, corporate income levy receipts increased 10.2 percent.

Moreover, the state’s hotel tax collections rose 6.4 percent in fiscal year 2010.

At the same time, however, general excise tax receipts fell 4.4 percent, an indicator that consumer spending is still lagging.

Collectively, the state’s general fund revenue dropped 0.5 percent for the fiscal year, the tax department reported.

The agency cautioned, though, that some tax refunds that normally would have been paid by June 30 were held back until the start of the new fiscal year, a moneysaving move instituted by Gov. Linda Lingle.

With that taken into account, state revenue for fiscal year 2010 actually jumped almost 4 percent, the agency noted.

The tax statistics are among data the state Council on Revenues uses to estimate the state’s revenue conditions in coming years.

Council Chairman Paul Brewbaker said Tuesday that the figures provide a mixed message to his panel about the strength of the state’s economy.

He noted that in early 2009, the council was chagrined by poor economic indicators and declines in tax revenue. Later, the council saw hotel taxes take a hit when swine flu prompted many tourists from Japan to cancel travel plans.

Those and other concerns led the council then to forecast a deeper drop in tax receipts than ultimately occurred, Brewbaker said.

The latest figures show Hawaii may be experiencing a tentative rebound, but he said his panel should assess them cautiously.