The state's surplus has grown to $893M. Here's what lawmakers plan to do with it
HONOLULU (HawaiiNewsNow) - With the start of the new legislative session roughly two weeks away, state lawmakers on Tuesday reviewed Gov. David Ige's financial plan and heard from economists about the state's financial outlook.
With statewide unemployment hovering around 2 percent, Hawaii is able to boast the lowest rate in the nation. It's one of several factors that contribute to a mostly-positive outlook.
"We're looking at close to 3 percent growth in visitor arrivals and 1 percent growth in real visitor spending for next year. About 1 percent job growth, between 1 percent and 2 percent real income growth," said Carl Bonham, executive director of the University of Hawaii Economic Research Organization.
The Ige administration is taking a conservative approach despite an $894 million surplus because state tax revenues haven't kept pace with the economy – and revenue growth can be unpredictable.
After setting aside money for the state's rainy day fund and pre-funding public workers' health benefits, there's $242 million left.
"We have to fit those into the financial plan, and there's very little discretionary funds left after that, so that's why the governor's supplemental budget is a very moderate or actually minimal increase in fiscal year '19," said Laurel Johnston, acting director of the Department of Budget and Finance.
State lawmakers are also being cautious, especially since it's unclear what impact the recent federal tax overhaul will have on Hawaii.
"It is better for us to kind of wait and see how Congress is going to move in the next couple months and then decide from there," said state Rep. Sylvia Luke, chair of the Committee on Finance.
State Rep. Andria Tupola, who serves as House minority leader, said the state needs to aggressively go after federal funds.
"I think we just need to stay centered on that conversation when we talk about any reform that happened at the federal level is keep coming back to Hawaii, and what we need to do here to either prepare or to get out there and ask or put ourselves out there in the forefront of what we need as opposed to chasing it down after it's gone," Tupola said.
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