Economic News For Vermont Not Good

Leading Vermont economists released new forecasts for the state economy on Friday and numbers were not promising.

One analyst, Jeffrey Carr, of Economic & Policy Resources in Williston, told officials he's not seen a similar decline in 30 years of state forecasting.

Gov. Jim Douglas and key lawmakers accepted the downgrade in a somber meeting of the state Emergency Board in Montpelier Friday morning.

The revenue outlook, the economists said, reflects stunning declines in consumer spending, housing construction and national financial markets, with unemployment projected to rise from the current 7.2 percent to 9 percent in the next two years. Housing prices are likely to decline about 5 percent over the same period.

As a result, the Board agreed to lower tax revenue estimates by another $44 million -- leaving a potential budget deficit of approximately $250 million -- for the upcoming fiscal year.

State lawmakers will now scramble to find additional spending cuts or tax increases -- or some combination of both -- before the Legislature adjourns for the year in two weeks.

http://www.wptz.com/money/19271093/detail.html