Despite a slow national economic recovery, Vermont’s revenues are coming in on target with projections.
That’s the good news, according to Tom Kavet, the Legislature’s economist. The bad news, Kavet told lawmakers on Wednesday, is that revenues aren’t expected to grow much either.
"Sometimes as the economy is recovering we get a real kick above and beyond what we’re expecting," he said. "This has been a very sluggish recovery and unfortunately pretty much right where we forecasted. So that’s what we’re looking at."
In his report, Kavet said the state is just now seeing revenues recover to levels recorded before the recession that began in 2008. Meanwhile, spending pressures have increased.
"The expense side of the equation hasn’t stayed still. So expenditures have gone up and revenues are just now climbing up," he said.
Because the demand for state services has continued to grow, the Legislature is looking at a $50-$70 million budget gap for the next fiscal year.