(HawaiiNewsNow) - Governor Abercrombie and his Budget Director Kalbert Young have to redo their budget after the Council on Revenues reduced its forecast for rebounding state tax revenue.
The Governor is required by law to base his budget on the official forecast of the Council on Revenue, a panel of economists from government, academia and the private sector.
He can under spend the forecast but he can't overspend it.
The Abercrombie budget did under spend, but its projected 200 million dollar surplus just disappeared in the twinkling of a forecaster's eye.
The new Council on Revenues forecast for tax revenue up 11.5% which sounds great but the old forecast had been even higher, up 15.5%.
The difference is enough to wipe out Abercrombie's projected 200 million dollar surplus.
This is for the current budget cycle, running through the end of June.
But it means a smaller base for the 6.5% increase still forecasted for the next budget cycle.
The way percentages work, that unchanged 6.5% is now a smaller number.
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