Will the federal government come riding to the rescue to make up the estimated $430 million in lost State of Vermont revenue next year? Or will (gulp) the Legislature need to sharpen its pencils and cut everything that’s not essential? Or both?
"The near-term revenue challenges are driven by a steep drop in consumption taxes — such as those on meals, hotel rooms and gasoline — related to the government's stay-at-home orders. While the gasoline tax could rebound next year as the orders are lifted, other revenue sources, such as personal and corporate income taxes, are likely to take a bigger hit. "It's not like this is going to be a steep second-quarter drop and things are going to bounce back," Kavet said. "It will be much longer lived and uncertain, pending what happens epidemiologically." Kavet and Carr are expected to present a more formal, consensus revenue estimate next month, but Kavet presented his own analysis for the 2021 fiscal year during Wednesday's meeting. He found that the state's General Fund would take in $266 million less than expected, while the Education Fund would be down $113 million and the Transportation Fund by $52 million."
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