(Host) The Douglas Administration is preparing for another round of budget cuts in the current fiscal year.
Governor Jim Douglas says the cuts will be needed because it’s very likely that the state’s revenue forecast will be downgraded once again next week.
VPR’s Bob Kinzel reports.
(Kinzel) Next week the Emergency Board will get an update concerning the condition of the state economy and the report isn’t expected to be good.
State officials say they’re bracing for another revenue downgrade in the current fiscal year and they anticipate that more adjustments may be necessary this winter.
The Legislature’s Joint Fiscal committee and the Douglas Administration have already cut this year’s budget by roughly $25 million and the governor says additional cuts will be needed to offset the new revenue shortfall:
(Douglas) "We need to continue to make adjustments as those revenue forecasts are changed and I think it’s entirely likely that the Joint Fiscal committee will have to make some difficult decisions within a very short period of time."
Douglas says the short term solution to Vermont’s financial problem is additional cuts because he doesn’t want to tap into the state’s rainy day budget fund at this time. The General Fund account has a balance of roughly $65 million:
(Douglas) "I don’t think it’s time to look at them yet imagine if we had accessed them already this year in advance of some additional potential downgrades the idea of a Rainy Day reserve is to use those funds when there’s a sudden and unexpected shortfall as long as we can anticipate the shortfall and adjust for it then we won’t need to tap those reserves."
The revenue downgrades also mean that next year’s budget will face significant challenges. The Douglas Administration is working on the outline of that budget right now.
The governor says raising taxes isn’t an option to help balance next year’s budget:
(Douglas) "I don’t think we can go to the well we’re a very heavily taxed state Vermonters understand that we have to meet the obligations of state government and the services that are important to Vermonters but we also have to remain competitive and there are other places around the country where their tax burden is a lot less so I think we have to make adjustments without resorting to tax increases and I think we can."
Douglas says any new budget cuts must be implemented as soon as possible to help minimize the impact of these cuts over the course of the year.
For VPR News I’m Bob Kinzel in Montpelier.