MONTPELIER, Vt. (WCAX) Disappointing revenue through the first four months of the fiscal year may put the state in danger of a revenue downgrade.
"We're kind of a very walking on eggshells position at this moment," said Senate Finance Committee Chair Sen. Ann Cummings, D-Washington County.
The Scott administration says personal income tax revenue was about $5.7 million dollars below target in October. Four months into the 2018 fiscal year, the state has raised $12.4 million less than the first four months last year. Typically revenues increase year to year rather than decrease.
"It's still early. Four months doth not a year make. We are watching carefully the revenues as they come in. I wouldn't call it trouble, but it is certainly something we're watching," said Vermont Finance Commissioner Adam Greshin.
Greshin says the state's personal income tax woes are the result of a declining work force. "One good reason for that could be that we're simply sending out fewer paychecks. Everyday six fewer paychecks," he said.
State economists will present an updated revenue forecast in January. If the economic climate does not improve they may recommend lowering the forecast. That means the state will have less projected revenue to spend on services for residents.
"I wouldn't be surprised, because the economy hasn't picked up. An awful lot of federal funding seems to be on the line and we're one of those states that gets more than we send out," Sen. Cummings said.
For now, the Scott administration is crafting its proposal based on the last forecast from July. "We are creating a budget based on estimates that were made in July, which is the normal protocol, but we will also have contingencies in our pocket in case we need to make changes," Greshin said.
Greshin says Gov. Phil Scott's budget proposal will include initiatives aimed at workforce and economic development.