FY ’09 Tax Revenue Drops 9.4%

The Hawaii Department of Taxation Wednesday released its final tax revenue report for fiscal 2009, which showed general fund revenue collections decreased by $436.1 million, or 9.4%, compared to fiscal 2008.

The final figures for the fiscal year that ended June 30 showed an additional $56.7 million was lost in the general fund, compared to the most recent projection from the state’s Council on Revenues on May 28.

That means Hawaii is now facing a $786 million revenue budget shortfall for the budget biennium that ends June 30, 2011.

Both estimated tax payments and wage withholdings were down, according to the report.

“The additional revenue loss as well as these two worrisome trends show that our economy is continuing to weaken,” Gov. Linda Lingle said in a statement. “It is imperative that we all work together to continue to make tough, realistic decisions to close the budget shortfall and remain focused on growing our economy for the long-term.”

The latest revenue report is likely to add more fuel to already fiery labor negotiations. Lingle is seeking concessions from public employee unions, who have resisted.

Last week, a state judge ruled against Lingle’s plan to implement three-day-per month unpaid furloughs for 16,000 state employees.

The Republican governor is expected to threaten layoffs as an alternative.

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