By REP. CAROLYN BRANAGAN
As part of Monday’s Joint Fiscal Committee meeting, legislative members heard from Tom Kavet, the economist who works for the legislature. As always, he’d prepared a thorough revenue forecast for the coming months and an economic review giving lots of information on fiscal year 2015, which ended July 1, and FY16, which we are in now. His reports showed revenue for FY15 came in below the latest estimates by 1 percent. The state’s economy is continuing very slow recovery.
Readers will remember that when talking of the state’s finances, we typically look at three major funds: the general fund, transportation fund and the education fund. Revenues for all three of these funds ended FY15 within 1 percent of the estimate made in January. I have been worried about the slow economic performance and slow recovery for quite a while. There is still no strong growth. It is premature to indicate Vermont’s economy has turned a corner. We are seeing continual incremental recovery at a very slow pace.
I still feel it would be better to lower expenditures rather than increase revenue. The information received on Monday at the statehouse showed all of the differences in revenue estimates for FY16 compared to FY15 were due to changes to income tax statutes and sales taxes during this past legislative session. In order to make the proposed FY16 budget ends meet, more revenue had to be raised. The revenue bill had to match the budget bill so all would balance amd so ends would meet.
Instead of reducing enough expenditures to meet matching revenue, majority legislators chose to raise taxes instead. The budget was short about $30 million, so that’s why the new revenue for FY16 was added. This shows clearly in the Kavet report legislators saw on Monday. The revenue predictions are up nearly $30 million, the same amount raised by the new taxes.
The bottom line still is this: Vermont is spending too much money. We are spending faster than the state revenue can grow. We should not be operating this way. That’s why I voted against the budget bill and the revenue bill.
There is much more to the budget explanation than I can write here. Legislators serving on the Appropriations Committee had a very difficult job. They worked extremely hard, and to be fair, they did make over $50 million in cuts before settling on the FY16 budget. But “cuts” doesn’t mean there is less money being spent than before; it means the increase is less than it would have been otherwise. The trouble we are in fiscally cannot be fixed in one year.
If you have any questions about the state budget, contact me at firstname.lastname@example.org. I want to hear from you.