Hawaii faces an additional $90 million dollar drop in tax collections, based on new estimates released by the state Council on Revenues.
The economists held an emergency meeting on Tuesday to re-examine the figures based on current events, like the tsunami disaster in Japan.
Governor Neil Abercrombie quickly issued a statement, promising to enforce a 10 percent spending reduction for all departments. He says the state will also use the Rainy Day, Hurricane Relief and special funds to meet the immediate shortfall.
The statement read as follows:
“Our administration has put forward a plan that will get us out of the immediate fiscal shortfall while moving Hawaii toward a New Day. We understand the challenges facing the state and we are being conservative as we work with the State Legislature to pass a budget that will get the job done.
“To meet the immediate shortfall over the next three months, we will enforce a 10 percent spending reduction for all departments. We will also use the Rainy Day, Hurricane Relief and special funds.
“For future years, the plan we put forward in February still stands. Our plan will add $1.3 billion to Hawaii’s economy–creating jobs and building critical infrastructure like schools, clean energy projects, and public facilities. Our plan restores critical government functions to help local businesses and invest in education. The plan balances the budget by making changes to the tax code, labor savings, and spending cuts.
“The people will not tolerate the status quo. They want jobs, better schools, energy and food produced here.”
The state is still trying to figure out how it will meet a $1.3 billion shortfall over three years.
Meanwhile, the Hawaii County Council Finance Committee continues with their special departmental review, as the Big Island wrestles to approve one of the most challenging budgets in years.
On Tuesday, the council heard from a number of department heads from Human Resources, Research and Development, Corporation Counsel… even the Police Department, seen here.
Councilmembers have said that everything is on the table this year.
The reviews conclude on Wednesday.