Henry Raymond
Fairfax News => Political Issues/Comments => Topic started by: Carolyn Branagan on July 26, 2012, 07:35:29 PM
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Press reports have been fairly accurate in relating FY2012 year end balances for Vermont's revenues and expenditures. I'd like to fill in some of the gaps.
It's true that preliminary results show Vermont closed the fiscal year with revenues exceeding the General Fund forecast by about $7 million. As I've written all year, it was the strength in Corporate Tax revenues that really helped create that $7 million overage along with the fact that the Sales/Use tax came in on target as did the Rooms/Meals tax. Personal income tax was on target, but withholding was weak, meaning the future earning power for Vermonters is uncertain. Property Transfer tax is below estimates, because sales are slower than expected.The Transportation Fund was around $3.4 million below forecast. The Transportation Fund is always a hard one to predict and for a long time we have been lowering estimates to come up with a realistic goal for tax revenue in this Fund. There were shortfalls again in the Gasoline tax, Purchase/Use tax and also fee receipts. None of the revenue sources that feed the Transportation Fund keep up with demand growth. The Education Fund was $300,000 behind estimates, not including Property tax. Pennies are still being counted, but these figures are fairly reliable.
It's tough to predict where revenues will come from and legislators and fiscal officers spend a ton of time trying to get an accurate picture. Wants and needs are never ending for state government. Somebody in Montpelier can always think up a place to put extra money, so the real work is done by the folks who figure out revenue. How much revenue will come in to a large extent determines how much will be spent out. I do my best to make sure the revenue estimates are realistic. So this year we were lucky. There was $7million more revenue than expected at the end of the year. All of the overage will be used to rebuild state buildings in fiscal 2013. It's true that the $7 million looks good sitting in the state checkbook, but honestly I think the economy looks weaker than it did in January.
Shortly we'll start thinking about building next year's budget. Early FY14 realities are :
*Federal changes will create a $20 million hole in Vermont's Medicaid share.
*There will be strong need to add over $8 million in heating funds for low income families and seniors.
* Vermonters will have to deal with the $120 million likely FEMA shortfall. Don't get me started, I'd like to resist the temptation to go on a long rant about that.
We are in an election year and that creates the tendency in some camps to soften end of year fiscal news, but the truth is the economy still is not good. I don't see a safe time to loosen up spending at all in the next year and FY 14 will be tight too.
Rep. Carolyn Branagan
Franklin-1, Fairfax/Georgia
Vermont House of Representatives