Governor’s new budget boosts spending $729 million

Related story: Hawaii's revenue projections improve

Gov. Neil Abercrombie on Feb. 21 unveiled his amended proposed operating budget for the next two fiscal years, calling for additional $729 million in spending compared to what was submitted to the Legislature in December despite a projected $800 million deficit.

The new biennium budget calls for $11.4 billion in spending in fiscal 2012, a 5 percent increase over the original budget, and $11.3 billion the following year, an increase of 2 percent. The budget submitted in December called for $10.8 billion in 2012 spending, and $11.0 billion in 2013.

Abercrombie said he will balance the budget by repealing some tax exemptions, addressing unfunded retirement and health liabilities, making use of idle federal funds and reducing social services that don’t have a funding source. The governor also pointed to a more encouraging forecast by the state Council on Revenues, which is projecting general fund tax revenue to increase for the remainder of this fiscal year and next.

General excise and use taxes collected in December totaled $192.9 million, and year-to-date fiscal 2011 collections of general excise and use taxes have increased by 5.6 percent compared to collections in 2009. Meanwhile, December’s transient accommodations tax collections totaled $18.6 million, a 17.7 percent increase from the same month in 2009.

Hawaii’s visitor industry saw double-digit increases in visitor arrivals and spending in January, showing that the industry is picking up momentum — thanks largely to a robust winter travel season and major sporting events such as the Pro Bowl and Sony Open. 597,487 visitors came to Hawaii in January and spent a collective $1.2 billion in the Islands, the Hawaii Tourism Authority said on Feb. 24.