Hawaii
Council On Revenues Projects Hawaii Tax Collections Will Be Less Than Expected
The state will collect about $125 million less this fiscal year than lawmakers expected when they approved the state budget last spring, mostly because of a massive state income tax cut legislators approved in the final days of the last session.
The state Council on Revenues, a panel of experts tasked with projecting state tax collections each year, concluded Thursday that Hawaii is gradually recovering from the tourism slump triggered by the Aug. 8, 2023, Maui wildfires, while the construction industry is booming.
But the council maintained that state general fund tax collections will grow by a modest 3.5% this fiscal year and 2.2% next year because of the unprecedented tax cuts lawmakers approved in May.
New projections made public by the state Tax Department Thursday show the income tax cut in Act 46 will reduce state tax collections by more than $240 million in the fiscal year that began July 1, and will reduce collections by nearly $597 million the following year.
Another tax measure approved in the spring, Act 47, will reduce excise tax collections by an additional $33 million next year. That new law eliminates the state excise tax on medical and dental care services provided under Medicare, Medicaid and the military’s TRICARE.
The bottom line is that while the council projected in March the state general fund would collect $10.027 billion in taxes this fiscal year, the experts now expect actual collections to be slightly more than $9.902 billion.
The tax cut won praise from council Chairman Kurt Kawafuchi, who said it is a “really good policy of the administration and the Legislature to pass the tax relief.” He cited the increasing cost of essentials such as food and gasoline.
But the impact on tax collections may make it more difficult for Gov. Josh Green and state lawmakers to balance the state budget when the Legislature reconvenes in January. The amounts the state will forgo because of those tax cuts are scheduled to increase each year.
That may be creating a new normal for state government, experts said.
“Essentially, to make all of this pencil out, the state government spending — actual spending — needs to remain relatively flat for the next decade,” said economist Carl Bonham, also a member of the council.
He suggested that can be done in part by eliminating funding for vacant jobs in state government, an idea that Green has said he plans to pursue. But the council also briefly noted some hefty expenses that state government will have to pay in the near future.
Data provided by the Tax Department suggested the state must pay $537 million in hazard pay to unionized public employees who were required to work during the Covid pandemic, and the state faces major costs in the future to resolve lawsuits and help Maui recover from the wildfire.
Almost all of the public worker union contracts expire next year, and the unions certainly will be pressing for wage increases to offset the impact of inflation, Bonham said.
Green has said state budgets in the years ahead may be tight, but he expects the state will be able to pay its bills without raising taxes.
However, he has said he plans to once again ask lawmakers to impose a so-called “Green Fee” on visitors to help finance state efforts to cope with climate change.
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HONOLULU (HawaiiNewsNow) – Faith Kealohapau‘ole Paredes of Hālau Kekuaokalāʻauʻalaʻiliahi (Nā Kumu Haunani & ‘Iliahi Paredes) was crowned Miss Aloha Hula Thursday night at the Merrie Monarch Festival, topping a field of 13 competitors in the festival’s first night of competition.
The contest features performances in hula kahiko, hula ʻauana and oli, showcasing both technical precision and artistic interpretation.
Judges scored competitors on a range of elements, including kaʻi; interpretation and expression; posture and precision; hand gestures; foot and body movement; hoʻi; authenticity of costume and adornments; grooming; and overall performance.
The 21-year-old from Maui received 1,161 points.
“It’s surreal,” she said. “I’m just so honored and blessed to be able to show and share my lineage and share the hula from my hello with all of Hawaii and all of the world.”
Paredes also won the Hawaiian Language Award.
“Hula will forever live,” she said. “It is through us speaking out in ʻŌlelo Hawaiʻi. It is through us (to) not be ashamed of who we are and to hula on. Dance with your heart out.”
Paredes is a Kamehameha Schools graduate and attends Dartmouth College. She won the title of Miss Keiki Hula in 2015.
The rest of the finalists were as follows:
1st runner up: Keoe Momilani Michiko Hoe (1,156)
2nd runner up: Lahela Hoʻokela Medina Maio (1,134 points)
3rd runner up: Leimana Kaleinamanu Purdy (1,115 points)
4th runner up: Jelacia Naomi Waiauokalaniākea Peralta (1,098 points)
The festival continues Friday night with group hula kahiko.
View our Merrie Monarch Festival online hub here.
Samantha Makanani Aguon Newman
Nā Kumu Hula Karl Veto Baker & Michael Lanakila Casupang
Haily Kamakahukilani Nawahine Nascimento
Nā Kumu Hula William Kahakuleilehua Haunu‘u “Sonny” Ching & Lōpaka Igarta-De Vera
Kēhaulani Kaleikaumakamaeʻiʻomakamae Rubonal
Kumu Hula Keolalaulani Dalire
Mālie Kapuaonaonaikamauʻuuaolalokoikealohaokalaniākea Moe
Kumu Hula Kapua Dalire-Moe
Lilia Kaleialohaokealohalani Ka’ōnohi’ula Keohokapuakeakua Iokepa-Guerrero
Kumu Hula Niuliʻi Heine
Jovian Kauanoeokalaulani Range-Semisi
Nā Kumu Hula Kunewa Mook & Kau‘ionālani Kamana‘o
Keoe Momilani Michiko Hoe
Kumu Hula Robert Ke‘ano Ka‘upu IV
Lahela Hoʻokela Medina Maio
Nā Kumu Hula Tracie & Keawe Lopes
Faith Lynn Kealohapauʻole Paredes
Nā Kumu Hula Haunani & ‘Iliahi Paredes
Jelacia Naomi Waiauokalaniākea Peralta
Kumu Breeze Ann Kalehuaonālani Vidinha Pavao
Hiʻileilanikauakapukapuokeānuenue Puchalski
Kumu Hula Keli‘iho‘omalu Puchalski
Leimana Kaleinamanu Purdy
Kumu Hula Nāpua Silva
Līlianani Maya Rae Pi
Kumu Hula Kenneth Dean Alohapumehanaokalā Victor
Copyright 2026 Hawaii News Now. All rights reserved.
HONOLULU (HawaiiNewsNow) – The Hawaii State Legislature is entering the final weeks of the 2025 session with at least one point of agreement: income taxes will continue to decline for most families.
Both the House and Senate rejected the governor’s plan to cancel some tax relief, despite earlier uncertainty about the state’s financial situation.
“So what the Senate’s position is, is we want to make sure that the promises that were made are kept, especially with those families that make $350,000 a year or less,” said Senate Ways and Means chair Donovan Dela Cruz.
House Finance chair Rep. Chris Todd agreed the priority is ensuring ongoing tax relief.
Energy tax credits targeted to offset revenue loss
Continuing to reduce taxes means nearly $2 billion has to come from somewhere else. The Senate Ways and Means Committee voted to eliminate state energy tax credits for things like solar power and electric cars in 2029.
The credits could be saved if the economy improves.
“So this becomes a shared approach. Government cuts, business tax credits, get sunset, and then we’re still charging some of the higher end income brackets,” Dela Cruz said. “Their tax breaks are going to get repealed.”
House proposes tax increase on high earners
The House moved along a redesigned tax package that makes tax credits for spending on child care and food more generous and raises income taxes on families with incomes over $350,000.
“It would provide some ongoing tax relief to low to middle income families, but in return, we would request a 1% tax increase on very high income families,” Todd said.
The financial picture is clearer now, even with flood disaster costs, because of the federal disaster declaration.
“Now the state’s eligible to get reimbursed for a lot of these funds. We’re not sure what it’s going to look like, but that’s going to be positive for us,” Dela Cruz said.
Todd said the state is sitting on a solid reserve, a luxury not many states have right now.
All the proposals from the House and the Senate are now going into conference committee, where the final details will be worked out over the next month.
Copyright 2026 Hawaii News Now. All rights reserved.
WAIMANALO (HawaiiNewsNow) – The American Red Cross is assisting a family Thursday after a two-alarm fire was extinguished in Waimanalo.
The Honolulu Fire Department responded to Oluolu Street at about 3 a.m., staffed with 10 units and 39 personnel.
The first unit arrived at about 3:15 a.m. to find a working fire at a two-story residential building. No one was inside.
Flames and smoke were coming from the garage, said HFD. A hazmat team was dispatched to secure a 125-pound LPG tank that was exposed.
The fire was under control at 4 a.m. and fully extinguished at about 4:15 a.m.
No injuries were reported.
The American Red Cross was requested to assist the displaced family.
An investigation is underway to determine what caused the fire and damage estimates.
Copyright 2026 Hawaii News Now. All rights reserved.
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