State Revenues Recover; Small Budget Surplus Projected

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The state of Vermont is on track to record a small surplus at the end of the current fiscal year. But there are some troubling employment signs that could signal that the economic recovery in the coming months could be slow.

According to the latest revenue report, the state’s General Fund increased little more than 6 percent last month and this growth helped erase a shortfall from previous months.

Administration Secretary Jeb Spaulding said the new report shows that Vermont’s economy is experiencing some mild growth. But he’s concerned that there are indications that there may be some weaknesses in the state’s employment picture.

He said he won’t know until next month if these losses are the result of a disappointing ski season or an indication that the state’s recovery is slowing down.

"On the one hand, April was a very good month and we basically made up for the shortfall we had on the annual targets and then some," said Spaulding. "So I’m reasonably confident that barring any real global circumstances that influence us, that we should finish the fiscal year that ends June 30th on target or ahead."

Spaulding said overall revenue growth for the year will be pretty good, but not great.

"For the year now we’re on target and revenues are running about 2.8  percent ahead of where they were last year," he said. "So you know that’s improvement almost 3 percent increase in the revenues but it’s not going gangbusters either."

This year marks a change in the way that unexpected surplus money is distributed. In previous years, lawmakers allocated the extra money to a variety of programs.

Spaulding said this year any extra money will be spent on Irene-related projects, including the renovation of the state office complex in Waterbury and the construction of a new state hospital in Berlin.

"There’s a major climb there for the state and it’s going to put a real bind on future capital bills," he said. "So it seemed if we had some unanticipated surplus at the end of FY ’12 that that would be a good use for it and the Legislature agreed."

Under this year’s appropriations bill, any surplus money a year from now will be divided between the state’s Education Fund and the Rainy Day Budget Fund.

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