By Anne Galloway, VTDigger.org
Personal income tax receipts for April were the highest ever, according to the Vermont Agency of Administration. With two months left in the fiscal year, Vermont is $26.5 million (2.28 percent) above target, according to state figures. Gov. Peter Shumlin and lawmakers have indicated that any surplus at the end of the year will be held in reserve.
General Fund revenue came in 7 percent above projection for a total of $219.1 million collected in April, which is the most important month for the state budget because of the income tax filing deadline. The state collected $160 million in personal income taxes last month, about $10 million more than projected. The state anticipates $35 million in personal income taxes in May and $67 million in June, according to the Joint Fiscal Office.
But the good news has been tempered by estimates that show larger deficits looming in fiscal year 2017. As the governor and lawmakers work out their differences on resolving the fiscal 2016 budget hole over the coming days, a dark picture of next year’s budget is beginning to emerge.
Steve Klein, director of the Joint Fiscal Office (JFO), warned the House Appropriations Committee on Wednesday that the state has a “known problem” that amounts to $45 million to $50 million in fiscal year 2017.
Meanwhile, according to JFO, the state has been over-budget in Medicaid expenditures for months. State spending on the low-income health care program, Klein says, is also a “cloud on the horizon” for fiscal year 2017 that could push the General Fund gap to $60 million.
The most recent weekly report on Medicaid expenditures shows that Vermont is set to spend $15.6 million to $20 million more than was appropriated for FY 2015 by the end of the fiscal year, which is June 30. The Medicaid cost overruns could leave the state with a General Fund hole of between $7 million and $9 million in fiscal year 2016.