(Host) There’s been an important development for the Vermont economy. State revenues have finally matched levels that were recorded before the economic downturn that started in 2008.
And as VPR’s Bob Kinzel reports, the new revenue report also shows that Tropical Storm Irene didn’t have much of an overall impact on the state’s main tax sources.
(Kinzel) Members of the Shumlin Administration have been keeping a close eye on the state’s revenue picture for the last month to see if receipts from the state income tax, the sales tax and the rooms and meals tax would take a hit due to Tropical Storm Irene.
The answer seems to be no. Administration Secretary Jeb Spaulding says the new revenue report shows that any losses due to Irene have been largely offset by increases fueled by repair projects.
(Spaulding) "I think it’s good news I mean revenues are actually ahead of target – about $10 million ahead – for the first four months of this fiscal year so that is good news there’s no question about that."
(Kinzel) Spaulding says the report also includes an important milestone for the Vermont economy.
(Spaulding) "Our revenues for the first four months have now finally gotten back to the point that they were in FY 2008. So it’s taken us four years to get back to where we were in 2008 and of course we’ve had increases in health care costs and corrections and all those other cost pressures that the state budget has had to reflect."
(Kinzel) Tom Kavet is the chief economist for the Legislature. At a recent briefing, he said that while the chances of a double dip recession have increased, there’s also a reasonable possibility that consumer spending could encourage a number of businesses to begin to hire new workers.
(Kavet) "There’s an extraordinary amount of cash that corporations have. Corporate profits have rebounded very, very strongly and companies are in a position to invest and hire if and when demand increases."
(Kinzel) And Kavet said there’s a fairly strong foundation for an economic recovery.
(Kavet) "There’s a lot that can still go wrong but if we can maintain a certain amount of fiscal support in the short-term and a balanced approach to long-term fiscal correction which has to happen there’s good reason to think that the economy could grow in a substantial way."
Corporate revenues are showing very strong gains in Vermont. Receipts from the corporate income tax are running 45 percent ahead of initial projections.
For VPR News I’m Bob Kinzel in Montpelier.