(Host) Tax Commissioner Tom Pelham says he expects at least a $20 million surplus this year in the state’s Education Fund.
Pelham says rising property values over the past three years is a major reason why the fund is doing better than the overall state economy.
VPR’s Bob Kinzel reports.
(Kinzel) The condition of the Education Fund is in stark contrast to the condition of the state’s two other major funds, the General Fund and the Transportation Fund.
While those funds are experiencing a decline in revenue, the Education Fund is expecting a net surplus during the current fiscal year.
The Education Fund is comprised of several different tax sources, including the statewide property tax, part of the sales tax, a portion of the motor vehicle purchase and use tax and proceeds from the Vermont Lottery.
Tax Commissioner Tom Pelham says that while the consumption taxes are running below projections, the statewide property tax is doing well because it’s based on a three-year rolling average of Vermont’s equalized grand list.
The bottom line, according to Pelham, is at least a $20 million surplus in the Education Fund this year:
(Pelham) “These are extraordinary times from a fiscal point of view and the Education Fund will have an operating surplus to one degree or another. Obviously assumptions can change, but it looks relatively healthy and I kind of leave it there so that the leadership of state government has the information they need but then can use it as they see fit to help resolve our fiscal woes."
(Kinzel) The surplus could be used in a number of different ways. The Legislature and the governor could propose a small reduction in the statewide property tax rate or some of the money could be used to fill holes in the state budget.
In addition, some lawmakers are eyeing the surplus as a way to remove the transportation taxes from the Education Fund and use them to help boost spending on road and bridge repairs.
Pelham is expecting a healthy debate over how to use the surplus:
(Pelham) “So I think there are a lot of options, both in terms of managing education fund spending and then figuring out what to do with the operating surplus."
(Kinzel) Pelham says the surplus projection takes into consideration that there will be stronger demand for the state’s income sensitivity program this year due to a downturn in the Vermont economy.
For VPR News I’m Bob Kinzel in Montpelier.