Vermont economists say revenues will fall just short of goal
MONTPELIER — The state's revenue forecast got a slight downgrade Tuesday, due both to effects of international economic turbulence on export-dependent Vermont and some factors closer to home, like a December of minimal snow on the ski slopes.
Despite that news, Gov. Peter Shumlin vowed he would deliver a balanced budget proposal when he presents his fiscal 2017 spending plan to lawmakers on Thursday.
"While this news makes our job a bit more difficult," he said, "it is manageable."
Consulting economists Jeff Carr, of Williston-based Economic and Policy Resources, and Tom Kavet, of Kavet, Rockler and Associates of Williamstown, presented a consensus revenue forecast saying the state's collections of taxes supporting its general fund would be down 0.3 percent — about $4.7 million — for the current fiscal year from what the two forecast in July.
For fiscal 2017, which begins July 1, Kavet's and Carr's forecast came in $9.1 million, or 0.6 percent lower, than was forecast last July.
As Shumlin noted, the forecast changes were seen as adding more pressure on legislative budget writers, as they grapple with increasing costs for government programs, especially Medicaid.
Warm temperatures and minimal snow had led to "a dismal start to the important winter ski season," Kavet wrote in his report, with an expected $2 million loss in revenues from the state's rooms and meals tax.
One silver lining: This month's giant Powerball jackpot had brought about $400,000 more than anticipated into the state lottery.
At a more macro level, job growth in Vermont remains strong, the men said, with 21,600 new jobs since the low point of the Great Recession in 2009.
Shumlin, a Democrat who announced in June he would not seek a fourth term this year, sought to paint things in a positive light.
"Vermont's economy continues to grow, month over month and year over year," Shumlin said. The economists reported the state has the 10th lowest unemployment rate in New England.