LIHUE — Hawaii’s economy remained relatively strong through the year, with continued job growth, increasing wages and tax revenues that exceeded government projections in 2018, according to an annual financial report released last week by the Department of Accounting and General Services.
In an overview of the state’s economy included in the accounting department’s report, Comptroller Roderick Becker said during the third quarter of 2018, Hawaii’s economic indicators were mostly positive.
Tourists came to Hawaii in greater numbers and spent more money than they did in the third quarter of 2017. Tax revenues are also up from last year, as are average salaries.
The only category tracked by the comptroller’s office that did not increase compared with last year’s third quarter was the number of government contracts awarded.
And positive growth is expected to continue into next year, according to the latest economic forecast by the state Department of Business, Economic Development and Tourism, which said that the state’s economy is doing well, although growth has slowed in over the last few years.
“Hawaii’s economy is still expanding, and we see our construction industry performing well with the value of private building permits having increased by 3.6 percent and government contracts awarded increased 39.3 percent during the first three quarters of 2018,” said DBEDT Director Luis Salaveria in its report last month.
General fund revenues were $179.0 million, or 2.4 percent, more than expected.
Most of that total came in the form of corporate and individual income taxes, which generated over $155 million more than what was projected by the state’s budget.
Inheritance and estate taxes, along with government charges for services and debt service reimbursements, also contributed to that surplus, each coming in $10 million over budget.
But the state still spent about $2 billion more than it generated in fiscal year 2018, and its overall net position dropped by $718.4 million dollars over the course of the fiscal year, in spite of a $326 million increase in revenue generated mostly by airport and harbor fees.
The largest expenses were for education, welfare, health, general government, public safety and highways. But according to the report, the decrease in net position is primarily attributed to increased postemployment benefits and pension liabilities.
The state’s postemployment benefit liabilities increased $145 million when a Governmental Accounting and Standards Board rule was amended.
And at the beginning of the fiscal year, the operations of Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital were transferred from HHSC to Kaiser Permanente resulting in a $250.7 million transfer of net pension liability to the state.