(Host) In less than a month, the Vermont Legislature will begin to craft a new state budget. But when lawmakers return in January, they’ll face an unprecedented financial situation.
VPR’s Bob Kinzel looks at the state’s short-term revenue problem.
(Kinzel) State officials are having a hard time establishing a reliable economic trend for the new fiscal year because revenues for the first five months of the year have been on a roller coaster ride. They were up in July, down in August and September, and way up in October. Officials were anxiously awaiting the November revenue report to see if October’s gains would continue, but a preliminary examination indicates that revenues are slumping once again.
Administration Secretary Sean Campbell says the new report confirms that the state’s economic outlook is very uncertain:
(Campbell) “And if anything is clear, it’s that we have to be careful not to trend on any individual or single numbers. We’re just in a mode where we have to watch very carefully and take each month as it comes and just track this year very carefully.”
(Kinzel) The revenue trend will be very important this winter when lawmakers consider this year’s supplemental budget bill. Governor-elect Jim Douglas says increased caseloads in several human service programs will require additional funds for the agency.
In order to balance this year’s budget, Douglas says any increases will have to be offset with cuts. This will be difficult because the fiscal year will be more than half over. Some lawmakers want to tap into the state’s rainy day fund to avoid more cuts, but Douglas strongly opposes this approach:
(Douglas) “I certainly would look to ways to reduce expenditures in order to keep the budget for fiscal 2003 in balance. I don’t want to go the rainy day fund budget reserve to any further degree. In fact, over the next couple of years, we’ve got to do just the opposite. We’ve got to replenish those reserves in order to restore it to its full 5% level.”
(Kinzel) The state’s Emergency Board will meet in January to consider the revenue picture. If economic conditions do not improve over the next two months, it’s likely that the board will make another downward revision in the state’s revenue projections. That’s a move that would put even more pressure on budget programs this winter.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.