By Anne Galloway, VTDigger.org
A revised revenue forecast for fiscal year 2016 puts the state back in the black. State economists say the general fund tax receipts will grow by 3 percent in the coming year, or by $40 million.
At the beginning of 2015, revenues were down by $18 million.
The revised forecast, presented by Jeffrey Carr, the economist for the Shumlin administration, and Tom Kavet, the economist for the Vermont Legislature, shows modest growth in the state’s economy.
But most of the projected uptick in tax receipts, roughly $30 million, is the result of tax increases that were enacted this year. The tax changes include an expansion of the sales tax to include sugary drinks, the elimination of a tax deduction for state taxes paid in a prior year, a cap on tax deductions, and a new meals tax on vending machine products. In addition, lawmakers found $53 million in spending reductions to help fill a $113 million budget gap.
Without the tax changes, general fund receipts would have grown by $9 million, according to Kavet.
General fund spending for fiscal year 2016 grew by 4.1 percent, or $59 million, to a total of $1.469 billion. Total spending grew by 1 percent and is projected to be $5.531 billion, including federal funds, transportation and education.
Fiscal year 2015 ended with $25 million more in the state kitty than anticipated. The surplus will be used to subsidize the Low Income Home Energy Assistance Program (LIHEAP, $5 million) and for unanticipated state Medicaid expenditures ($13 million). The remainder, roughly $7 million, will be divvied up for retired teachers’ health care (50 percent), the education fund (25 percent) and the rainy day reserve (25 percent).