UHERO Briefs
How Can the State Government Restore Fiscal Balance?
UHERO BRIEFS ARE CIRCULATED TO STIMULATE DISCUSSION AND CRITICAL COMMENT.
The findings and recommendations are those of the author(s) and do not reflect the views or official positions of UHERO, the University of Hawai’i, or any funding or supporting organization.
The impact of COVID-19 and the efforts taken to contain it have led to a rapid deterioration in the state’s short- and medium-term fiscal outlooks. At its May 28 meeting, the State Council on Revenue (COR) cut its general fund tax revenue forecast for FY2020-FY2026 by almost $10 billion. The Hawaii Constitution requires the Legislature and the Governor to “consider” the COR forecast numbers in developing their budgets. If the Legislature and/or the Governor prepares a budget that exceeds the Council’s revenue estimates, they must publicly declare this fact, including the reasons for it.