(Host) There’s mixed news concerning the strength of the Vermont economy.
State revenues have fallen for the third month in a row, creating a $14 million hole in next year’s budget.
But the state’s unemployment rate dropped again giving Vermont one of the lowest rates in the country.
VPR’s Bob Kinzel reports:
(Kinzel) A drop in personal income tax receipts is the major reason why state revenues have failed to meet their targets for the last 3 months.
Administration Secretary Jeb Spaulding says there are several possible explanations for this decline. First, more Vermonters are filing their income tax returns earlier than usual using the state’s electronic filing system.
And second, a tough winter season for Vermont’s tourism industry has had an impact on overall state revenues:
(Spaulding) "There’s definitely no other way to slice it. I mean three consecutive months of under-performance is not what we want to see and it does put a red flag up from a budgetary perspective."
Despite the revenue trend for the past three months, Spaulding says he remains optimistic about the long term outlook for the Vermont economy.
(Spaulding) "When I talk to our economists they do not believe that this is the result or is an indication of an underlying weakness in our economy. Just today the latest unemployment rate came out and it’s now 5 percent down from 5.2, on a national level consumer confidence is going up and there are other indicators that there is a steady improvement in the economy itself."
(Kinzel) The state now has three months to make up a $14 million shortfall.
Based on this information, Spaulding thinks it would be prudent for lawmakers to cut back on bills that will require new state money.
(Spaulding) "The point we’re at is we’re not able to support the spending proposals that are out there beyond what we’ve proposed in our budget."
(Kinzel) Despite the disappointing news in the General Fund, both the Transportation Fund and Education Fund are both on track to meet their revenue targets for the year.
For VPR News, I’m Bob Kinzel in Montpelier.