Council on Revenues Increases Growth Forecast by 1% for Fiscal Year 2015
News Release from Office of Senator Sam Slom March 12, 2015
HONOLULU—Today, the Council on Revenues projected a 5.5% growth in revenues for the state, up 1% from their January projection of 4.5%. This translates to an additional $191.4 million in anticipated revenues to the state general fund for fiscal biennium 2016-17.
Senator Sam Slom says, "The Council on Revenues' projection is optimistic, and I caution against that kind of optimism when state cash reserves are as low as they are. The question that needs to be asked is, 'Where are we in the business cycle?' If we are closing in on an economic downturn, it is problematic. A low cash balance can also negatively affect our state bond rating."
Senator Slom urges that the Legislature treat the Council's projection with caution, and put the additional funds in the state cash reserves.
Senate Minority budget director Paul Harleman says, "The Government Financial Officers Association (GFOA), recommends that states maintain at least 15% of general fund revenues in cash reserves. The term 'cash reserves' refers to any surplus revenues, plus the Emergency Budget and Reserve Fund and the Hurricane Relief Fund. Currently, Hawaii has about 10% in cash reserves."
Senator Slom continued, "It would be imprudent to use this current forecast as a justification for increased spending. The responsible thing to do would be to put it away, and make sure our state has adequate cash on hand."
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