State income tax revenues continue to fall short of monthly projections but there's considerable debate over what these numbers really say about the health of the Vermont economy.
"If we wait until April, we would not have a lot of time to take action before the end of the fiscal year." - Administration Secretary Jeb Spaulding on why the administration wants to reduce spending in the current year budget as soon as possible to deal with a revenue shortfall.
Through the first five months of the current fiscal year, collections for the state income tax are running roughly $18 million below projections. At the same time, revenues from the state sales tax and the meals and rooms tax are coming in slightly ahead of the Shumlin administration's estimates.
Administration Secretary Jeb Spaulding says the November revenue report is a mixed bag of information.
"There are a lot of good things going on, job growth and underlying economic growth seems to be improving; the consumption taxes are doing better than forecasted,” said Spaulding. “But the income tax itself, which is the largest component, the largest source of revenue for the state, has been under-performing for several months in a row."
Spaulding says there's a question if the decline in monthly income tax withholding numbers give an accurate portrayal of the condition of the Vermont economy.
He says he won't know for certain until the tax season ends in mid-April. If there is a major problem, Spaulding says that's much too late to try to reduce spending before the current fiscal year ends on June 30.
"If we wait until April,” said Spaulding, “we wouldn't have a lot of time to take action before the end of the fiscal year."
Spaulding says the administration will not make immediate budget cuts at the request of legislative leaders who want to be part of these decisions.
But he says the administration will reduce its spending by not filling vacant positions in state government.
