State braces for sharp decline in revenue due to coronavirus pandemic

Coronavirus

HONOLULU(KHON2)–The State is being told to brace itself for a sharp decline in revenue, meaning lawmakers will need to look for areas to cut spending. It’s largely due to coronavirus.

The Council on Revenue’s forecast means the state could be facing money problems. Lawmakers are scrambling looking at other ways to generate income.

In a statement Governor Ige said: “Although there will be an impact on our residents, it is not yet clear to what extent or how we’ll be impacted.”

“Our issue is that we haven’t really diversified our economy and we’re too reliant on tourism,” Senator Donovan Dela Cruz said. Dela Cruz is Chair of the Ways and Means Committee.

The slump in tourism due to the coronavirus is causing a ripple effect in the state’s economy.

KHON: “What does the Council on Revenue’s prediction that there’s going to be a dip or decline, what does that mean?”

“That means a loss of revenue for the state roughly $15 to $20 million in just this current fiscal year. And it also means a large reduction of $280 million in the next fiscal year,” Dela Cruz explained.

Money the state uses to pay for everything from salaries for government workers to state services.

KHON: “Does this mean that taxes could go up for normal working families?”

“If at all possible, I think that is something that we’re trying to avoid because in these hard economic times that’s the last thing that people need,” Dela Cruz said.

Dela Cruz said they want to boost construction to create jobs and seek out public, private partnerships to reduce government spending.

Less money, means the state will have to cut its budget somewhere. Dela Cruz said they will be taking a long hard look at where to make those cuts.

Lawmakers are also forced to deal with the repercussions of people staying home due to COVID-19.

“One of the discussions that we’re having is with the Department of Labor and they’re looking at ways that we can provide some kind of assistance,” Dela Cruz said.

A spokesperson for the Department of Labor and Industrial Relations (DLIR) said many who are self quarantined “may not qualify for temporary disability insurance (TDI) or workman’s compensation.

Lawmakers are discussing temporarily changing some of those requirements due to COVID-19, according to DLIR.

DLIR also said they “anticipate an increase in unemployment.”

“(DLIR) is asking for 24 people because they understand that it’s going to be a surge of people coming up that will need that kind of assistance. So we are looking currently at about $10 million package to deal with the situation,” Dela Cruz said.

The select House Committee on COVID-19 Economic and Financial Preparedness meets at the State Capitol Room 329, Thursday at 10A.M. The meeting is open to the public.

KHON2 will be streaming the meeting live at khon2.com and via our KHON2 news Facebook page.

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