(Host) According to the latest revenue report, the state will end the current fiscal year with roughly a $25 million deficit. Money will be taken from the rainy day budget fund to cover this shortfall.
VPR’s Bob Kinzel reports.
(Kinzel) The new report clearly shows that Vermont is continuing to experience a serious weakness in its personal income receipts. For the first 11 months of the fiscal year, these revenues are almost 17% below revised projections.
Administration Secretary Kathy Hoyt says the state is entering the final month of its fiscal year almost $22 million in the red and Hoyt expects this deficit will grow when June revenues are tabulated:
(Hoyt) “What we’re thinking at this point is that we’ll be down a bit more in June. We certainly can’t see that June revenues would make up our shortfall and I think we’ll be down a few more million dollars. So expect that we’re going to be looking at about $25 million down by the end of the year.”
(Kinzel) Hoyt says the state will dip into its rainy day budget fund to cover the deficit. Currently the account for the General Fund has $44 million in it.
Hoyt thinks the drop in personal income tax revenues is the direct result of major job losses at the beginning of the year:
(Hoyt) “What is obvious is that the layoffs that occurred about 6 months ago at IBM and some other places in the state are beginning to show their toll in the revenues now. And that’s in withholding and within some of the other categories. That just reflects how much we are finally being hit by the recession.”
(Kinzel) Hoyt says the deficit shows that revenue projections for the new fiscal year are too optimistic. The Legislature’s Joint Fiscal Committee will meet next month to consider a proposal to lower these projections. The committee is also expected to review a plan from the governor to implement immediate cuts in the new state budget.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.