State Revenues Falling Short by $25 Million
(Host) Administration Secretary Kathy Hoyt says it's likely that the state will need to take roughly $25 million from its rainy day fund to balance this year's budget. After reviewing a new revenue report, Hoyt says it's clear that there will be at least a $20 million shortfall in income tax revenues when the fiscal year ends on June 30. In addition, the state needs to make other revenue adjustments that could total as much as $5 million.
Hoyt says income tax receipts are falling far below projections, because the economic recovery that is taking place at the national level has yet to occur in Vermont:
(Hoyt) "I think it's been the recession and the effect of the capital gains in the private equity market.... And when that personal income category, which is so critical in terms of our total general fund targets, is down that's how we feel it. So until there's a recovery that actually reaches down into Vermont, I think we're going to be looking at bases that get adjusted downward until we start picking up again."
(Host) Hoyt says she supports using money from the rainy day fund to balance the current fiscal year budget, but she strongly opposes any effort to use the fund to pay for programs in next year's budget. Hoyt argues that "one time" money, like the rainy day fund, should not be used to finance the ongoing operations of state government.