HONOLULU – The Council on Revenues raised its forecast for Hawaii General Fund tax revenue on Tuesday, saying it now expects a 6.3% increase in revenue in the current fiscal year instead by 3%.

The council cited predictions that visitor numbers would exceed last year and expectations that COVID-19-related hospitalizations would decline as more people get vaccinated.

Council members said their previous forecast for the fiscal year ending in June was too conservative. The council made the prediction in May, before travel skyrocketed during the summer. The board maintained its 4% growth forecast for the next fiscal year, which ends in June 2023.

Hawaii law requires the governor and lawmakers to use the Council on Revenues forecast when writing the state budget.

The number of travelers has fallen from its peak of over 30,000 per day during the summer.

Carl Bonham, a board member and professor of economics at the University of Hawaii, attributed part of that drop to seasonal changes and part of the increase in COVID-19 cases fueled by the delta variant.

Despite this, he said an average of 19,000 travelers made it to Hawaii every day during the first week of September.

That’s well above the numbers recorded at the same time last year, when Hawaii still required all travelers to be quarantined for two weeks upon arrival. Hawaii now allows travelers to show proof of vaccination or recent negative COVID-19 tests to avoid quarantine.

Bonham predicted that hospitalizations would decrease as vaccinations increase, helping travel return around Thanksgiving.

“In my opinion, by Christmas, the tourism industry will recover. And we’re going to take a break with very little job growth, but we’re still going to compare – for tax purposes – this winter with last winter, ”he said.

Bonham said his tax revenue outlook took into account lower unemployment benefits and lost federal stimulus payments from a year ago.

Another board member, Scott Hayashi, said he was somewhat optimistic about the outlook for the exercise.

“With the potential closure of Europe to American travelers, Hawaii again looks like a great destination,” said Hayashi. “They can’t go to Europe. They can’t go to Asia. If they want to run away, they might think they’re going to come to Hawaii.