This commentary is by Don Keelan of Arlington, a retired certified public accountant.
I am somewhat of a novice in analyzing the Vermont state budget, especially for the fiscal year 2023-24, which started July 1.
I know several adverse events have occurred within the state since the budget was developed and adopted. I believe Gov. Scott should recall the Legislature to take a new look at the $8 billion-plus document.
The 2023 Legislature comprised a supermajority of Democrats and Progressive members who firmly believed this was the year to remove all constraints on the state’s treasury and fund programs dear to them for years.
The small Republican sector of the House and Senate could do very little to stop “the runaway train,” and the governor’s veto was a blank bullet. With the spending programs shielded, the money flowed.
Mother Nature’s impact and other extraordinary factors were not anticipated when the budget was developed.
By April, approximately all of the maple industry tree taps were pulled; the season was over except to hear the results. Several months later, the results were reported. The maple syrup crop was disappointing: The 6,350 million taps, down from last year by 300,000, resulted in 2,045 million gallons of syrup, which is a 20% decline from 2022, according to a detailed report in Vermont Business Magazine’s July 2023 issue.
Then, May arrived, and a killing frost did as its name describes, killing most, if not all, of Vermont’s apple crop and scores of other fruit, flowers and plants. The damage was so widespread that the state declared many sectors “a disaster area” so federal funding could assist with the dollar loss.
More bad news for Montpelier in early July when it heard that the prior four months of state revenue from personal income tax collections did not meet expectations, according to Vermont Business Magazine. What can be expected going forward if this is the last four months of the fiscal 2022-23 year?
The state has been through worse crises, but it seems to worsen. In late June and early July, the attorney general agreed to settle the lawsuits filed against the state for its negligence in the Northeast Kingdom’s EB-5 scandal. The reported payout amounted to $16.5 million. Whether this vast cost to the state will come from the general fund or insurance, this writer does not know. Nor does he know if it was even budgeted. But it is real.
On June 22, 2023, the Legislature returned to Montpelier, and after only a few hours of discussion, the legislators congratulated themselves on overriding the governor’s veto of their huge and historic spending plan.
About 20 days later, Mother Nature had her plan. Much of the state was devastated by close to 12 inches of rain, including outside the front door where the Legislature had convened three weeks earlier. State Street in Montpelier became a river.
The devastation to Vermont’s manufacturing, retail businesses, nonprofit and government buildings, and the agricultural sector was exceeded only by the 1927 flood. It will take years and tens of millions of dollars to recover if it is even possible.
Affected government operations will recover over time; however, many businesses, just now getting over the Covid pandemic losses, will not and will be gone forever. Even longtime operated farms face the same future.
How these disasters will impact the state’s financial well-being continues to be evaluated and undoubtedly will take months to do so. If that is the case, it is time for the Legislature’s leaders to return to Montpelier and rethink the spring spending spree they unleashed on the state.
The state, its citizens and businesses might be “Vermont Strong” (and tough), but they are not rich when sending dollars to Montpelier.
