Vermont’s revenue remain steady, state economist cites AI as major risk

Vermont’s financial outlook remains steady according to recent reports from the state’s top economists. During a bi-annual briefing for state lawmakers and Gov. Phil Scott, officials noted that personal income withholding has officially crossed the billion-dollar mark. This fiscal health suggests a period of stability for the state budget as it enters the second half of the year.

Despite the positive revenue figures, state economist Tom Kavet issued a warning regarding the influence of the artificial intelligence sector on the current economy. While Vermont has experienced growth tied to the industry, Kavet described the current reliance on AI as a significant gamble. He noted that the state is participating in a larger national trend where AI serves as a primary driver of financial performance.

Gov. Phil Scott expressed mixed sentiments regarding the sector. He acknowledged the revenue gains but noted that the rapid speed of technological change necessitates regulatory reform to ensure the state remains in control of its policy environment. He emphasized that the pace of AI growth currently creates a degree of unpredictability that requires monitoring.

Legislative leaders, including Representative Robin Schue, voiced concerns about the long-term impact of relying on a single industry to bolster state revenues. With current gains offsetting impacts from factors like tariffs and international conflict, there are questions about how long these conditions will persist. The next formal update on state revenue is set for January.