(Host) Administration Secretary Charlie Smith says the state remains on target to record a roughly $45 million dollar surplus when the 2005 fiscal year concludes at the end of the month.
Smith says the state revenue report for May shows reasonable growth in most of the state’s broad-based taxes.
Smith says lawmakers and the Administration have agreed on a plan to use most of the surplus money:
(Smith) “The surplus funds are, in effect, spoken for through Medicaid, through various projects that are viewed as being one time projects. So for all intents and purposes the money is spent. But we do envision being able to hold some of that in reserve, in undesignated reserve, for mid-year adjustments that may be necessary.”
(Host) Smith says it would have been a mistake to use the surplus to reduce taxes at this time because the state faces an uncertain economic future:
(Smith) “There’s reason to feel that the surplus levels may not be perfectly sustainable. So it’d be risky to do a major tax cut when these revenues feel like kind of a one-time surge.”
(Host) Smith says he continues to be concerned about the sluggish performance of the state’s Transportation Fund. Revenues from the Purchase and Use Tax are far below projections because fewer Vermonters are buying new cars this spring.