MONTPELIER — Economists told Vermont legislative leaders and Gov. Phil Scott that state revenues and forecasts have remained relatively level despite the uncertainty and tumult generated by President Donald Trump and his administration.
Tariffs and federal budget cuts dominated the conversation at Thursday’s meeting of the Emergency Board, composed of Scott and four state House and Senate committee chairs in charge of the state’s budget and financial policy.
Overall, state economists increased their expectations for the state’s coffers by about 2%, driven by higher than expected income tax revenues. Vermont’s Transportation Fund, which pays for roads and bridges, was downgraded by just over 2%.
The relatively cheery outlook took some at the meeting by surprise, given the news coming out of Washington, D.C. The Trump administration’s tariffs have fluctuated constantly, fueling booms and busts in the stock market. The passage of the so-called Big Beautiful Bill, with its cuts to Medicaid and other safety net programs, has further fueled concerns.
Plus, in this year’s state budget, lawmakers and the administration agreed to plan for contingencies if — or when — federal funding cuts arrive.
“I feel like we should be preparing differently,” Rep. Emilie Kornheiser, D-Brattleboro, chair of the House’s tax-writing Ways and Means Committee, said at the meeting.
“That’s pretty much what the report says, ‘Don’t get comfortable,’” Tom Kavet, an economist for the Legislature, responded.
Looking beyond the state’s tax revenue, Jeffrey Carr, an economist for Scott’s administration, addressed the labor market, particularly concerns about what could happen if the Trump administration ramps up immigration enforcement.
“I don’t know how we’re going to do a roof in this state if we get rid of all the illegal immigrant labor,” he said.
Agriculture, construction and health care are all economic sectors in Vermont with high rates of undocumented immigrants in the workforce, according to the economists.
On housing, the state financial experts highlighted some signs that the market could finally be cooling. Five out of 14 counties saw median home listing prices drop year-over-year, Carr said. The number of listings increased in all but one county during that same time period.
“Maybe the world isn’t going to continue to go quite so crazy in the housing markets,” Carr said.
