State tax collections are holding up despite the impact of the deadly Maui wildfire, and will continue to grow at the brisk clip of 4% or more this year and next year, according to a state panel of experts.

The Council on Revenues, a panel of economists and others tasked with projecting state tax collections each year, voted Monday to hold firm on its previous projection of 4% growth in collections for the fiscal year that ends June 30.

The council slightly increased its projection for the following year from 4.75% to 4.8%, but that change will have only a tiny impact. The council’s projections are the basis of the state general fund budget, but each change of 1 percentage point amounts to a shift in tax collections of more than $90 million.

The projections were unanimously approved by the council, and are actually fairly conservative. State tax collections thus far for this fiscal year from July through the end of February been running 6.3% ahead of last fiscal year, so the state could end up with more cash than the council expects.

Council members cited a glut of Honolulu office space, a relatively soft real estate market and still-high interest rates as issues of concern in the months ahead, but said they anticipate strong growth in construction.

Carl Bonham, executive director of the University of Hawaii Economic Research Organization, said the federal cleanup of debris from the Lahaina fire is progressing at a pace that suggests some infrastructure rebuilding will get underway by the end of 2024.

“I think you will see significant activity in 2025 specifically on Maui. The vast majority of that will be infrastructure, but there will also be housing,” he said.

The new projections are a bit of good news that comes as lawmakers have been fretting over the cost of the Maui wildfire recovery effort, which has been rapidly changing and evolving.

Gov. Josh Green initially earmarked $199 million for the recovery costs for this fiscal year, but on March 1 he wrote to lawmakers requesting an emergency appropriation of an additional $297 million to cover housing and other expenses this year for fire victims who are not eligible for federal assistance.

Those people include undocumented immigrants, Micronesians and families with small children who were homeless before the fire, and the Federal Emergency Management Agency has so far declined to pay for their shelter and other support costs.

How much of that cost the state will need to pick up has been in flux as the state and FEMA negotiate over who qualifies for federal support. In the meantime, the state is paying $1,000 per day to support those families and provide them with services under a contract with the Red Cross.

While it isn’t clear how much the Red Cross contract will eventually cost the state, lawmakers know it will be expensive: The House Finance Committee last week voted to include $122.5 million in its proposed state budget to cover those costs for FEMA ineligible families.

Green also asked lawmakers in his March 1 message for another $65 million for the state’s share of the One Ohana fund to compensate people who died or were seriously injured in the Aug. 8 fire.

The plan is to have the One Ohana fund pay compensation of up to $1.5 million for each fatality provided that the victims’ surviving family members agree to not pursue wrongful death claims in court against the state or a half dozen other contributors to the fund. At least 101 people died in the Lahaina fire.