State Budget Surplus

[bschorr]

Thanks to rapidly rising tax revenue the State of Hawaii, remarkably, has a surplus. Our governor is now debating what to do with it. What do you think she should do with it?

-B-

[Stuart Sibley]

To what is the rise in revenues due?

[bschorr]

To what is the rise in revenues due?

Skyrocketing property taxes largely. As an example, our 4-bedroom house appreciated about 50% in 5 years. New houses that 4 years ago were being advertised as "From the high $300s" are now being advertised as "From the low $700s." That's in the same subdivision. The housing market seems to be cooling off a bit, but it's still pretty good.

There are several big new Condo developments going up around Downtown right now - at least one of them is almost sold out (despite barely having broken ground) and the early-in buyers were paying low $700s for 2/3 bedroom condos. According to the papers some of those buyers have already flipped the properties for more than $1 mil -- and again, I think they're still pouring foundation.

There have been some tax increases and also the economy here is running generally quite strong so other tax revenues are doing pretty well.

And, of course, the second biggest industry in Hawaii is the military and there is no shortage of defense spending these days. The economic downside is that tens of thousands of our residents, who would normally be buying stuff, eating stuff, going to bars and movies and talking on their cell phones and...have been in Afghanistan and/or Iraq for much of the last couple of years.

But the economy has been strong enough to overcome that relatively small factor.

-B-