(Host) The state of Vermont has just closed the books on the 2003 fiscal year. Administration Secretary Michael Smith says there’s a good chance the state will meet its revenue projections for the year. It’s a sharp contrast to the fiscal health of many other states.
VPR’s Bob Kinzel reports:
(Kinzel) It’s interesting to note that the state of Vermont, the only state in the country that doesn’t mandate a balanced budget, is in stronger fiscal shape than virtually every other state.
According to a new report released by the National Governors Association, 41 states have a combined budget gap of $74 billion. In 37 of these states, the revenue shortfall represents at least 5% of their entire general fund. And in 19 states the revenue gap amounts to at least 10% of the fund.
Although the final figures for the 2003 fiscal year in Vermont will not be tabulated for another week, the state entered the month of June $5 million ahead of projections. Administration Secretary Michael Smith says initial reports for June show that revenues are stable:
(Smith) “I think it will help us for our end of the year. Obviously we’re looking to be on target for the end of the year and – knock on wood, if everything goes according to plan – we will be on target.”
(Kinzel) Smith says the state is in good shape because lawmakers have restricted spending in recent years and because the state had rainy day funds in place to help balance the budget:
(Smith) “We have depleted our rainy day fund down to around $12 million, it needs to be about $45 million. Our plans are to use some of that federal money to build back up that rainy day fund. But in these tough times we did have to tap into the various rainy day funds that we have.”
(Kinzel) Arturo Perez is a fiscal analyst at the National Conference of State Legislatures. He says the Vermont experience is in stark contrast to many other states:
(Perez) “No doubt the situation over this past year has proven to be among the worst fiscal years or worst budget situations for states in history. The situation across the country was somewhat of a perfect fiscal storm, in that the same time that equity markets nose dived from their peaks a couple of years ago, the economy started to soften up, and then we had the terrorist attacks, unemployment increased, and we had a short recession with a continuing economic problems across the country.”
(Kinzel) The state’s Emergency Board is scheduled to meet in two weeks to review the state’s revenue projections for the new fiscal year.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.