This Friday is the deadline for members of House Appropriations to pass a budget bill out of their committee. Colchester Rep. Maureen Dakin and her colleagues on that committee have done a remarkable job of chopping what was a $70 million budget deficit into an $8 million gap. Now comes the time to look under all the couch cushions to fill the remaining gap without raising any new taxes.
On House Ways and Means, where I serve, we’ll be trying to cobble together enough revenue to cover about $5 million of the remaining deficit amount. We’re looking at a variety of options.
The legislature’s Joint Fiscal Office tells us we’ll be able to raise at least $1.4 million by requiring stricter reporting standards for third party money processors, such as PayPal. The more rigorous reporting will enable taxpayers to be more accurate in determining their taxable incomes.
We may also look at the option of requiring the state treasurer to share a larger percentage of the unclaimed property fund. The treasurer holds about $12 million in unclaimed property assets. In 2015, more than 13,000 claims were made and about $5 million was returned to the rightful owners.
A share of the assets above the required minimum is turned over to the general fund, about $2 million last year. It’s possible we may ask for a slightly larger share of the fund.
We may also ask the Vermont Department of Taxes to renegotiate the tail end of their computer modernization contract. The department entered a 10-year contract with FAST Enterprises, a Colorado company that specializes in state revenue collection and processing.
The contract they signed established baseline amounts in all the different tax categories: personal income tax, corporate income tax, rooms and meals taxes, etc. FAST gets paid for their software and computer support services by claiming 80 percent of all tax receipts above the baseline amounts, which are adjusted somewhat for inflation.
We could free up at least $1 million to help patch the budget gap by lowering the FAST share to 60 percent of revenue over baselines and extending the payment period. A contract is a contract, and FAST will be paid what it’s owed. But lowering the annual burden on the state would be a big help in closing the budget gap without raising taxes or fees.
We will balance our budget. Looming down the road, however, are the impacts of possible federal funding cuts to Vermont. A special session later this year is not out of the question.
If you’d like to discuss these or any other issues, you can always reach me via email at email@example.com or by calling me at home at 655-5764.