Gov. James Douglas painted a dark picture of the state’s economy for reporters at his weekly press conference on Thursday.
Douglas announced that revenue figures for January have come in $5.5 million below the most recent revenue forecast, or 4.5 percent less than expected.
“That underscores the fact that we’re in very uncertain territory from an economic standpoint and emphasizes the need to take important steps to right our fiscal condition as quickly as we possibly can,” Douglas said.
He also made reference to a recent White House report that indicates unemployment in the United States will remain at 10 percent in 2010 and projects an ongoing rate of 6 percent for the next five years.
This makes passage of the “Challenges for Change” bill, S. 238, all the more imperative, Douglas said. He thanked the Senate for passing the bill this week, and asked the House to push the $38 million plan forward.
“Moving quickly on this $38 million plan will allow us to proceed with certainty on the $151 million challenge that we’re facing,” Douglas said. “The effort goes beyond next fiscal year’s budget. If we can achieve state budget efficiencies now we’ll realize even greater savings in the future. That’s essential because the effects of this recession are going to continue for a few more years.”
The ultimate solution, however, Douglas said, is “growing our tax base and ensuring Vermonters have access to good jobs that pay good wages.”
Douglas also urged the Legislature to pass the so-called jobs bill, which would infuse $8.7 million in federal stimulus dollars in the economy, before Town Meeting Day. He said the money would be used for what he called “critical economic development needs,” such as workforce training, spring planting grants for farmers, capital for companies, tourism marketing and broadband investments.
He also called for a roll back of capital gains and estate tax changes that “the Legislature imposed last year.”
“We’ve to make our state more competitive economically,” Douglas said. “If we’re going to avoid a slow and halting recovery we have to have a competitive tax burden and provide incentives for creating more jobs.”
When asked whether he thought the jobs bill should have been pushed through the budget adjustment bill for fiscal year 2010, so that $1 million of that funding could have been made available for dairy farmers, Douglas said he had hoped the jobs bill would have been passed by the end of January. Sen. Vince Illuzzi, R-Essex-Orleans, had tried to attach the bill to the budget adjustment act, but the House objected, Douglas said.
“We can talk about process all we want, whether it’s budget adjustment or the jobs bill, farmers need the money to plant their crops very soon,” Douglas said. “And 40 companies need that job training money on March 1, VEDA can get some more low cost loans out to create more jobs as soon as possible. We can start expanding broadband as quickly as we can do it. I don’t think Vermonters care about the legislative process, they need the money.”
Douglas said the $8.7 million in stimulus dollars is being used for economic development programs instead of filling the budget gap because they are “one-time” dollars, funds from the federal stimulus bill from February of last year, that won’t be available next year.
“One-time dollars should be used for one-time purposes,” Douglas said. “Remember, the purpose of the recovery act was to create jobs. Last year I was critical of legislators for … building (some of those funds) into the budget base. They put money in Public Safety and we need the state police every year and we don’t want those dollars to go away so I think this is exactly the purpose for which these were intended.”
