State must prepare to be hit hard by financial losses tied to coronavirus, legislative leaders say

State must prepare to be hit hard by financial losses tied to coronavirus, legislative leaders say

HONOLULU, Hawaii (HawaiiNewsNow) - Hawaii’s legislative leaders said Friday that they were preparing for the possibility that financial losses tied to the global coronavirus outbreak could dramatically impact the state’s budget, which depends heavily on tourism and imports.

With the outbreak continuing to spread across large swaths of Asia, some of those impacts are already being felt.

The state’s Department of Business Economic Development and Tourism reported a drop in international arrivals of more than seven percent in February alone. And the state is bracing for the loss of more than $20 million in visitor expenditures because of the decision by Hawaiian Airlines to temporarily suspend flights to and from South Korea.

Speaking to members of the state House on Friday afternoon, Rep. Scott Saiki warned that the loss in tax revenue had the potential to create a situation as dire as the recession of 2008 and 2009, when the state was faced with a multi-billion dollar budget shortfall.

“What we went through during those years, there were budget cuts of $2.1 billion over a three-year period,” Rep. Saiki said. “It was during those years that the state had to make some drastic decisions.”

That recession saw the implementation of several emergency budget control measures, including the infamous ‘furlough Fridays’ that reduced the public school week to just four days.

This story will be updated.

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