In 2002 the state of Vermont experienced a significant recession and the impact on the state’s economy was felt in all sectors. I had just been elected to the legislature and it was inspiring to see so many parts of state government work together with the state legislature to get Vermonters back on their feet and the economy producing again. It took a couple of years, but it came back. Fortunately Jim Douglas was governor and he knew what he was doing. A former state treasurer, he understood how the pieces of government fit together.
In 2008 there was another recession. Again state government pulled together with the legislature for the good of Vermonters.
And now it is 2020, we are experiencing a harsh recession, foreseen by no one and compounded by Covid 19 fears. It is fair to say this recession is a biggie. We seem to have slowed down the progression of virus and now it’s time to look at where we are and find the best path out for our economy.
In getting a good idea of our fiscal position, we first need to look at the state revenue.
There is some federal money promised, but the exact amount is unknown. So for now, if deferred taxes are all paid and allocated to FY 2020 (the year they were due), then the shortfalls in revenue from the January estimates are:
General Fund will end the year down $48 million,
Education Fund will end the year down $54 million,
Transportation Fund will end the year down $44 million.
The state does have some money on hand, funds for use in times of great need. It is rare that they are ever touched, but the reserves are there to use if we are in need.
General Fund reserves......
Stabilization reserve-in 2020 $79.8 million,
RainyDayFund reserve-in 2020 $31.6,
HumanServices caseload reserve-in 2020 $98.2,
Dedicated use reserves-in 2020 $18.4,
Total General Fund reserves ....FY2020 $228.1.
Transportation Fund reserves....FY $13.8.
Education Fund reserves......FY $37.0.
Overall we are not in a good fiscal position. Certainly some tough economic times are ahead as we build our economy back. First we must make sure our population is safe and healthy. Then state government should do what it takes to get our economy running again. Gov.Scott’s plans to slowly open up are careful and based on science and good understanding of economy. The legislature may have some ideas to add. Jobs, incomes, skills training and using our resources for the most good should be immediate goals .
Vermonters are resourceful, and as they have bent the Covid 19 curve, they will build back our economy. It will be a tough task, but we can do this.
Do as much good as you can.
More info coming.....