Officials see signs of more stable revenues
07/08/09 5:50PM By Bob Kinzel
| MP3 || Download MP3 |
(Host) State officials say there's evidence to suggest that Vermont's tax revenues are stabilizing, so there won't need to be budget cuts, for now.
But the debate is continuing between the Douglas Administration and Democratic leaders over the use of federal stimulus money.
VPR's Bob Kinzel reports.
(Kinzel) Is the state's economic glass half full or half empty? The Douglas Administration and Democratic leaders have very different answers and their differences could be a preview of the political debate that will emerge leading up to the 2010 elections.
Over the course of the last year, Vermont's revenue forecast was adjusted downward four times - an action that resulted in cuts to the 2009 fiscal year budget.
As the new fiscal year begins this month, Vermont's revenue base is roughly 10% lower than just 12 months ago - it's a reduction of approximately $110 million.
Next week, economists will issue their new revenue forecast. Senate Appropriations chairwoman Susan Bartlett, who's also a Democratic candidate for governor, says she's expecting some better news for a change:
(Bartlett)"In most parts of the state, modestly priced homes are really beginning to move so again the things they told us to watch for are beginning to happen. So I am very optimistic that we're at the bottom and can start to slowly but surely come out of this."
(Kinzel) But Administration Secretary Neale Lunderville doesn't share Bartlett's optimism:
(Lunderville)"But just because there's not a big drop doesn't mean that we're out of the woods. We're - if anything right now - bumping along the bottom...and there probably will be more downs before there are ups."
(Kinzel) Lunderville says he's concerned about the state's budget future because he thinks lawmakers relied too heavily on federal stimulus money to balance the 2010 budget. It's a budget the governor vetoed but became law when the Legislature overrode that veto:
(Lunderville)"But that's one time money and that money will go away and is one of the reasons we're going to have to take a hard look at the budget and continue to reign those budgets in so that we aren't left with a big cliff at the end of the next fiscal year."
(Kinzel) Bartlett doesn't see a budget cliff on the horizon because she thinks lawmakers will restructure some programs and because she thinks revenues will begin to rebound:
(Bartlett)"So I'm confident that as we are looking at this in several years that we'll get through it fine."
(Kinzel) As the state closes its books on the 2009 fiscal year, it will do so without tapping into the Vermont's rainy day funds.
That's because the federal stimulus money was available and because the state unexpectedly received $14 million in the settlement of a single estate last year.
For VPR News I'm Bob Kinzel in Montpelier.