(Host) The state’s new revenue report shows a continued weakness in income tax receipts. Administration Secretary Kathy Hoyt says it will probably be necessary to tap into the state’s rainy day fund to balance this year’s budget.
VPR’s Bob Kinzel reports.
(Kinzel) State officials were eager to get a look at the results from the January revenue report because January is one of the largest revenue months of the year.
Administration Secretary Kathy Hoyt says the results, for the most part, are disappointing and indicate that the Vermont economy is still in recession. Personal income tax receipts were off by just over 15% for the month.
Hoyt says this loss is a combination of job layoffs and a significant reduction in capital gains tax receipts:
(Hoyt) “We really are reflecting the recession profile. We have significant negatives, if you look at where we were in terms of history from last year. So I think it’s nothing that we didn’t expect but I get a little concerned when we had just set new targets which were less than what we had as a target for January, even a month and a half ago, and its down.”
The administration has been urging the Legislature not to use any money from the state’s rainy day funds to balance this year’s budget because it expects more revenue shortfalls in April. Hoyt says a preliminary review of early income tax returns indicates that the administration’s prediction is going to be correct:
(Hoyt) “I think that our paid estimates in January being down by 26% from what they were and with strong refunds it means that we could have some surprises. That’s why we need to have our rainy day funds available at the end of the year, if that’s the case.”
Hoyt says there was some good news in the January revenue report. Receipts for the sales and use tax were up 18% indicating the holiday shopping season was more successful than officials predicted it would be.
For Vermont Public Radio I’m Bob Kinzel in Montpelier.