(Host) State revenues are climbing higher, but Governor Peter Shumlin says he wants to be cautious about spending any surplus.
As VPR’s John Dillon reports, state economists tell the governor and legislative leaders that Vermont’s economic recovery is slow and tentative.
(Dillon) Twice a year the governor and the chairs of the legislative money committees look ahead to revise the state’s revenue forecast.
The bottom line in the current projection is that Vermont is crawling back from a tough recession. But revenues are only now getting back to levels last seen four years ago – before the bottom fell out of the national and global economy. Jeff Carr is an economist who advises the Shumlin administration.
(Carr) "We get back to about, within $10 million, of our peak general fund revenues back in fiscal year 2008 in the upcoming fiscal year."
(Dillon) Carr and legislative economist Tom Kavet said the revenue forecast should be raised only slightly for the next fiscal year – 0.6, or about $7 million.
Kavet said Vermont is in somewhat better shape than many other parts of the country.
But he pointed to employment statistics, and said job growth has stalled both here and nationally.
(Kavet) "You see that the downturn didn’t go quite as deep, the upturn’s been a little bit better. We’ve had a little bit better job growth than the U.S. But, notably, we have this sort of downturn right at the end. And that’s problematic looking ahead."
(Dillon) Governor Shumlin also sounded a cautious note about state revenues.
(Shumlin) "There’s still plenty of turbulent waters. I think the good news is that our economy is slowly recovering, that Vermont is recovering a little faster than some of the colleagues that I just met with at the National Governors’ Association, who are seeing double digit unemployment numbers. And that we have a lot to be hopeful about. But we also have to remember this is one-time money. We did slightly better than projected, and we’ve committed most of that money to important things."
(Dillon) The state closed the fiscal year with about $37 million more than projected. But Shumlin says the money is needed in two areas. First, he wants to raise the state’s reserve funds in order to have money set aside for future economic downturns.
(Shumlin) "If the last few years taught us anything it’s that our reserves are not high enough for tough times. And second, I very much want us to start putting aside money to build the state hospital. We have our most vulnerable population of Vermonters in unacceptable conditions. That’s not the way we treat people in Vermont."
(Dillon) The state economists said most of the revenue surplus came from growth in personal and corporate income taxes. But they said there are serious warning signs on the economic horizon that could affect Vermont, such as higher oil prices and the risk of the debt crisis spreading in Europe.
For VPR News, I’m John Dillon in Montpelier.