MONTPELIER, Vt. — Vermont budget experts say the state is expected to take in almost $29 million less in the general fund in the current fiscal year than had been forecast in May, the state’s Emergency Board was told Friday.
Of the nearly $29 million shortfall, $16.3 million is due to pending corporate refunds. The other $12.5 million is a base revenue reduction, said the reports prepared for the committee, made up of Republican Gov. Phil Scott and the chairs of two money committees from the House and Senate.
Separate shortfalls of $3.5 million were reported in the transportation fund and another $2.2 million in the education fund.
Vermont’s total fiscal 2018 budget is about $5.8 billion.
Republican Gov. Phil Scott and top financial lawmakers were told the shortfalls could be made up.
But economists Tom Kavet and Jeff Carr told lawmakers that while the current economic recovery is continuing, the amount of revenue growth the state can depend on is smaller than in previous recoveries.
“Here we are again explaining why revenue growth has disappointed,” Carr told the committee during a presentation with Kavet.
He said the state is in the eighth year of the current economic upturn, the third-longest such upturn since World War II, but over those years revenue growth has been less than was seen in previous economic expansions. During those periods lawmakers would enjoy an occasional, what he called “a waterfall,” where revenues grew faster than expected.
That is not happening now.
Chances are that in the next four or five years the state will be dealing with, if not a recession, at least “a cyclical pullback.”