HONOLULU — The Council on Revenues on Thursday predicted that the Hawaii’s general fund tax receipts will surge 15% during the current fiscal year through June as tourism recovers from the COVID-19 downturn.
During the next fiscal year, which runs from July through June 2023, the council expects general fund tax revenues to climb 6.9% from this year as the rebound continues.
Hawaii law requires the governor and the Legislature to use the council’s forecasts when they draft their budgets.
Council members said the omicron coronavirus variant is causing COVID-19 case numbers to jump in many parts of the world but that wasn’t stopping tourists from coming to Hawaii.
“What we’re seeing right now is that U.S. visitors don’t seem to care. They’re traveling. And it doesn’t seem to matter what’s going on,” said Carl Bonham, an economics professor at the University of Hawaii at Manoa.
Oahu traveler bookings for the January-March quarter of this year are “surprisingly strong.” Bonham said. Reservations for other islands were likely even better, he said, because Oahu’s numbers are depressed by the absence of Japanese and other international travelers.
Both the current and next fiscal year forecasts are higher than the council’s prior estimates of a 6.3% increase and a 4% rise, respectively.
Wendell Lee, a certified public accountant, said U.S. travelers will continue flowing into Hawaii until it becomes easier for them to travel outside the country.
“They’re going to just keep coming until the world opens up. That’s not going to be for another year or so,” Lee said.
Kristi Maynard said she shared another council member’s concerns about the negative effect of residents leaving Hawaii in general she believes the economy will do well.
“U.S. visitors are just coming in droves,” she said.
Bonham said higher inflation is a problem for households on fixed incomes but wages have risen for food service and retail workers.
“And right now, the visitors are paying much, much higher prices. And that’s all generating tax revenue,” he said.
