When Neil Abercrombie kicked off his 2014 re-election campaign in Kakaako two months ago, he said his administration made “hard choices” to bring the state out of “fiscal chaos.”

“And so we have now,” Civil Beat reported the governor saying, “I believe, among the most stable if not the most stable state government, financially, anywhere in the country.”

The state’s economic recovery is front and center in the governor’s campaign.

But is it true? Does Hawaii have the most fiscally stable state government in the United States?

To find out, Civil Beat checked with the bipartisan National Conference of State Legislatures and its State Budget Update: Spring 2013.

The NCSL budget report was released in early May, not long after Abercrombie spoke. Compared to many states, Hawaii fares well. Examples:

• Twenty-three states … reported that personal income tax collections exceeded the latest estimate. Eight of these states — California, Hawaii, Indiana, Montana, Oklahoma, Oregon, Utah and Wisconsin — saw collections surpass an estimate that had been revised upward.

• Regarding sales tax collections, Hawaii, Oklahoma and Utah were beating estimates that had been raised.

• Nineteen states reported corporate income tax receipts above estimates, including Hawaii, Montana, New York, Oklahoma, Oregon, Utah and Wisconsin that had raised their forecasts.

But NCSL also warned that defense spending cuts due to sequestration “are likely to affect state economies, especially those that rely heavily on defense expenditures. Overwhelmingly, states reported that defense related furloughs, layoffs and other personnel issues cause the greatest concern because they are most likely to directly affect state revenues.”

In Hawaii, said NCSL, “budget discussions have included potential general fund support to offset sequestration related cuts.”

Still, “Hawaii officials noted that wage reductions to defense and contract personnel will result in a loss of business activity and related tax collections.”

The NCSL budget report also has a lot to say about fiscal stability.

“Most legislative fiscal directors describe their state fiscal situation as ‘stable,'” the report said. “This reflects the slow but steady recovery that most states are experiencing almost four years after the Great Recession ended.”

Some states, however, described the current fiscal situation in their states as “cautiously optimistic,” “strong” or something similar — a notch or two above “stable.”

As seen in the chart below, when it comes to fiscal situations, North Dakota is “very positive,” Texas and Montana are “strong,” Indiana is “stable to good,” Nevada is “stable to optimistic” and Iowa, South Dakota and New Hampshire are “cautiously optimistic.”

BOTTOM LINE: The governor’s claim contains elements of truth: Hawaii is indeed fiscally stable, and by several measures is doing better than many other states. But it is false to say that Hawaii is the “most stable.” This Fact Check concludes that Abercrombie’s claim is HALF TRUE.

Source: National Conference of State Legislatures

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