Wed, Oct 11, 2023 2:39 PM
By Merrilee Gasser, The Center Square
Hawaii lacked enough money to cover $11.4 billion worth of bills at the end of fiscal year 2022, according to a new report.
The state had $11.2 billion available to cover $22.6 billion worth of bills, which breaks down to $15,000 per taxpayer. Overall, Hawaii has a taxpayer burden of $23,100 per taxpayer, according to Truth in Accounting’s State of the States report.
The think tank annually ranks states based on their fiscal health. This year, Hawaii remained in the bottom five despite some financial conditions improving. Other bottom five states included Massachusetts, Illinois, Connecticut, and New Jersey came in last.
Hawaii ranked 46 out of 50, receiving an “F” financial grade, which is given to any state with a taxpayer burden greater than $20,000. Only six states including Hawaii received “F” grades.
Hawaii’s financial pitfall came despite having a balanced budget requirement, which calls for spending to be equal to revenue brought in during a specific year. Only Vermont does not have this type of requirement.
Sometimes states find ways to fulfill the balanced budget requirement by inflating revenue assumptions or counting borrowed money as income, the report said.
Some factors improved for Hawaii financially in 2022. Although its investment income dropped, it increased its funded pension promises, which the report said was due to “substantial” investment income the pension system received in 2021.
Hawaii was among 28 states that did not have enough money to pay its bills. Total state debt across the nation was $938.6, a decrease from $1.2 trillion at the end of fiscal year 2021, the report found.
Two factors contributing the most to decreased state debt were increased tax revenues and temporary federal COVID funds, according to the report.
“Hawaii’s economy rebounded post-pandemic: hotel occupancy was up 18.6% from 2021, and total tax revenue increased by over $1.2 billion,” the report said. “However, this was not enough to move Hawaii out of the bottom five Sinkhole states. Furthermore, Hawaii depends on tourism dollars and the recent devastating fire on Maui may adversely impact Hawaii in 2023.”
West Maui just began reopening to tourists this week after being closed for two months following the Aug. 8 fires in Lahaina.
The Hawaii Department of Business, Economic Development & Tourism told The Center Square air bookings were down for October compared to last year and domestic passenger counts to Kahului Airport were lower than the daily average before the fires.
Maui isn’t expected to reach its previous tourism levels until next year.