State economists held their bi-annual budget update with the Governor Friday, the take home message? Lower your expectations.
"The macro-economic trajectory has been lowered a little bit from what we are looking at in January" state economist Tom Kavet said.
In a presentation to the emergency board Kavet cited dysfunction in Europe and Washington as contributing factors in the slower than expected economic recovery.
"We're watching the economy carefully and closely it does seem with the downshift in the macro economy there's concern there will be a little less revenue" Kavet said.
Their report shows the U.S. Dollar at historical lows, causing exports to flourish both nationally and here in Vermont. Despite the fact that 2012 left the state with $63 million in revenue and the fourth lowest unemployment rate in the country at 4.6%.
"Our ability to balance budgets in Vermont to maintain our extraordinary bond rating and to be fiscally smart not to spend money we don't have is paying off" Governor Peter Shumlin said.
The report indicates the housing market has bottomed out and that prices will be climbing slowly over the coming months.
"It doesn't mean we're going to have a quick recovery there were going to see some small gains. There will be a bit of a floor and eventually we're going to see some more construction and jobs in the construction sector" Kavet said.
He says their last report indicated a stronger recovery would be underway by 2013, now they're saying it will be closer to 2015.
"If you added up across all three funds in fiscal year 2013 we're $11 million less than we thought we would be with a higher economic trajectory and we're about $20 million less in fiscal year 2014" Kavet said.
It's a time when every penny counts. As the nation tries to recover from the recession, Vermont takes on another recovery, using most of its revenue to come back from Irene.
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