Strengthening Our EconomyPosted on Jul 29, 2014 in Main
Upon taking office, Gov. Neil Abercrombie faced a budget deficit of $220 million. In response, he and his administration established responsible fiscal management practices while creating a sound, multi-year financial plan for Hawaii’s future. As a result, the State of Hawaii ended fiscal year (FY) 2013 with a positive general fund balance of $844 million – a $1.1 billion turn-around over three years.
More recently, this progress was followed by another positive ending balance of $664.8 million for FY 2014, even after contributing $55.5 million toward replenishing state reserves via the Hawaii Hurricane Relief Fund and setting aside $100 million for the state’s unfunded liability for retiree health care benefits.
Anticipating the likelihood of future revenue fluctuations, the Abercrombie Administration’s six-year financial plan was crafted with fiscal sustainability in mind, aiming to further build up fiscal reserves and manage long-term liabilities, while continuing and in some cases restoring critical state services.
In addition, focused investment in state infrastructure and facilities has helped keep Hawaii’s unemployment rate at among the lowest in the nation, presently at 4.4 percent. And, the replenishment of the state’s Unemployment Compensation Trust Fund, which was bankrupt in December 2010, allowed for a reduction in the unemployment insurance tax rates for 2014 by 35 percent on average, resulting in employers paying $130 million less in taxes, or $300 less per employee on average for 2014.
The State of Hawaii is finally on the correct path to maintain its economic momentum, build financial reserves, meet previously unfunded financial obligations, and keep a fiscally prudent general fund balance. These solid financial decisions allow Hawaii to move forward with confidence and further invest in education, conservation, clean energy, and other long-term priority areas.
Recent Reports on Hawaii’s Growing Economy & Restored Fiscal Stability
- Hawaii’s Unemployment Rate at 4.4 Percent in June
(4,800 Increase in Non-Farm Jobs over the Year – July 17, 2014)
- DBEDT’s 2nd Quarter 2014 Statistics & Economic Report
(State Forecasts Stable Economic Growth – May 14, 2014)
- DBEDT’s Research and Economic Analysis Division Report on Construction & Hawaii’s Economy
(DBEDT Releases Current Study on Hawaii’s Construction Industry – Feb. 20, 2014)
- State of Hawaii’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2013
(Annual Report Highlights Hawaii’s Improving Economic, Fiscal Trajectory – Feb. 3, 2014)
- State Announces Reduction in Unemployment Taxes for 2014
(Improved Rates Projected to Save Employers $300 per Employee – Dec. 19, 2013)