From taxes to tourism, Hawaii economy shows improvement - Hawaii News Now - KGMB and KHNL

From taxes to tourism, Hawaii economy shows improvement

By Howard Dicus - bio | email

HONOLULU (HawaiiNewsNow) - Hawaii economic indicators are improving at last, with two key developments Thursday: an upward revision on forecasted tax revenues, and a good report on April visitor spending.

The Council on Revenues, which as recently as March thought the current fiscal year would see state tax revenues fall 2.5%, changed its forecast to an increase of 4%. With only one more month to go, that means the fiscal year could get $273 million more state tax income.

It's not enough money to undo spending cuts in state government, but it is enough to pay more tax refunds in the current fiscal year instead of delaying them until the next fiscal year begins in July.

The council, whose members are drawn from government, academe and the private sector, also revised its forecast for the next fiscal year from a 6% increase to a 6.2% increase. If it works out that way, it means $290 million dollars in extra tax revenue.

The state also put out its April visitor industry report Thursday, showing more spending in April than in the same month last year, and $133 million more visitor spending for 2010 to date.

The trend has continued since April: visitor arrivals counts by the Hawaii Department of Business, Economic Development & Tourism have shown higher arrivals, especially from Asia, during May, and Hospitality Advisors LLC has reported improving hotel occupancy in recent days as well.

The Hawaii Department of Labor & Industrial Relations reported Thursday that weekly jobless claims have held below 19,000 for several weeks, with some incremental improvement on all islands.

Year-to-year comparisons can look better than they are, since tax revenues were greatly reduced in the previous budget year, and tourism in spring 2009 was weighed on by Asia fears of swine flu and other factors. Nevertheless, this confluence of improving indicators hasn't been seen in more than two years, and raises the possibility that an economy which bottomed out over the winter is now gaining traction.

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