HONOLULU (AP) — Hawaii state agencies are reducing discretionary spending by 10 percent until the economy has measurably improved, Gov. Neil Abercrombie’s budget director said.
The budgets could be restored if tax collections actually meet the latest forecast by the state Council on Revenues.
Departments received 90 percent of their general fund budgets for the first quarter of the fiscal year when the year started Tuesday, Budget Director Kalbert Young said.
The Council on Revenues is predicting 5.5 percent revenue growth in fiscal 2015. In its latest forecast in May, it reduced its expectations for fiscal 2014 from flat to down 0.4 percent.
Young said he’s bullish on the estimate but wants to see it materialize.
“So, until I see that level of revenue growth actually materializing and the council forecasts moving into what is actualized versus just forecasted, I’m basically instituting some level of control and constrainment on the execution of the budget,” he said.
The Legislature approved a $12.1 billion budget for fiscal 2015, with a general fund of $6.1 billion.
The state restricted spending in a similar way last year, though only 5 percent.
“I actually am expecting to see revenues increase at least to the level that the council is forecasting,” Young said. “But considering where revenues were forecasted for fiscal year ‘14, I need to see that materialize before we start just spending according to what the Legislature appropriated.”