It turns out our sermons about the need to be flinty Vermonters paid off. Vermont is one of 12 states that can handle the stress of the Covid-19 crisis, according to Moody’s Analytics, the national ratings agency.
The company stress-tested all 50 states and a director from the company was quoted as saying, “You’re already head and shoulders above a lot of other folks who are out there by having done that in the past decade or so.”
The “that” to which he’s referring is being chipmunk-like and squirreling aways pots of cash in our various reserve funds. The funds total about $200 million, or 13 percent of the $1.6 billion we spend each year through the general fund.
According to those who watch the state’s finances, Vermont is on track to lose about $170 million in revenue by the end of the calendar year in July. We’re suppose to lose even more next fiscal year.
The ratings company looked at the state’s books and determined that if our legislators spent all the reserves we have over the remainder of this year and next that there would be a top-end gap of about five percent of the budget, or about $82 million that we’d need to make up through revenue hikes or budget cuts.
For perspective, almost half the nation’s states are looking at gaps that are double the percentage Vermont’s facing.
So being tight with a buck has its value; something the pandemic has probably etched in our minds.
The battle now [one of many] is getting the federal government to allow us to use the $1.25 billion they’ve sent to replace the revenue we’ve lost.
That would help immensely when it comes to avoiding deeper budget cuts than we’d like, or using ever nickle of the money we’ve tucked away.
Or, as Sen. Mitch McConnell says, we could just declare bankruptcy because he has a problem with “blue-state bailouts.”
Hmmm. Wonder how high Moody’s rates the feds?
by Emerson Lynn