State revenue growth forecast cut by 50 percent

Hawaii's Council on Revenues lowered its growth forecast on July 31, which will lead to more restrictions on state spending. The council said that state tax revenues will grow 1 percent during the fiscal year, which began July 1, down from the 2 percent growth prediction given in May. The revision will result in a loss of approximately $46.4 million in revenue.

The forecast for fiscal year 2010 also was lowered from 4.3 percent to 4 percent, a loss of approximately $16 million. The council cited the slump in visitor arrivals for the revisions.  In response, Gov. Linda Lingle told a meeting of 25 Hawaii hotel executives she is recommending that the Hawaii Tourism Authority spend $10 million more than originally planned to market the state to vacationers. The HTA has about $54 million to spend this year.

Lingle didn’t say where the extra money would come from but described it as a reallocation, suggesting money will be moved from one targeted visitor market to another. Lingle and Lt. Governor James “Duke” Aiona plan separate trips to Asia in November to promote the visitor industry, and have discussed similar trips to California.

Visitor arrivals fell 14 percent in July from a year ago and visitor spending fell 15 percent for the month. It was reported that following the closure of ATA and Aloha Airlines, the number of airline seats to Hawai‘i had decreased by 14 percent.

Meanwhile Honolulu’s jobless rate dropped to 3.9 percent in July down from 4.2 percent a month ago, according to the U.S. Bureau of Labor Statistics. A year ago the jobless rate was 2.8 percent. 18,000 people were out of work in July, compared with 12,800 in 2007. This number was down from 19,200 in June, however. The national unemployment rate in July was 6 percent, up from 4.9 percent a year earlier, and up from 5.7 percent in June.

In happier news, it was reported that Honolulu ranks 23rd among the wealthiest cities in the U.S., according to Bizjournals.com, Pacific Business News’ online partner, which surveyed 261 communities with populations over 100,000.

Bizjournals used a six-part formula to rank the cities; the strongest scores going to places with high income levels and large inventories of expensive homes. The formula included per capita income, median household income, percentage of households with income over $200,000, median home value, the upper 20 percent threshold for household income and the upper 25 percent threshold for home value.

Arlington, Va., was No. 1 on the list, with a per capita income of $53,543. Honolulu had a per capita income of $30,292, according to data from the U.S. Census Bureau’s 2006 American Community Survey.