by Timothy McQuiston Vermont Business Magazine The Vermont 2016 fiscal year ended June 30 and the final tax revenue report finished with a small shortfall, as expected. Personal Income taxes, the most important single revenue source, has been lagging all year, but finished the month ahead of its target. For the month overall, preliminary results show that General Fund revenue finished FY2016 1.13 percent below the revenue targets adopted by the Emergency Board in January 2016 (which had been lowered from the original targets last July). The numbers for the year would have been worse if an electronic tax filing glitch had not been rectified. In all, the total shortfall was not as bad as anticipated.
On a year-to-year basis, General Fund revenues grew by 2.3 percent over FY2015. The Transportation Fund and Education Funds finished FY2016 roughly on target with those projections, growing by 1.23 percent and 3.7 percent over FY2015 respectively. Also during FY2016 Vermont employers created 4,400 jobs, according to the Vermont Department of Labor, continuing a strong string of growth that has seen 17,200 jobs added since 2011. Vermont's unemployment rate of 3.1 percent continues to be one of the lowest in America.
Administration Secretary Justin Johnson said, “While preliminary results reflect we didn’t fully recover from the revenue shortfalls in April, we are very pleased the General Fund expenditures for the year have also come in under budget sufficient enough to compensate for the revenue shortfall. We will balance the FY '16 budget without dipping into any reserves.”
“I am also pleased that Vermont continues its long and steady run of year-over-year growth, we finished the year $31.70 million or 2.30 percent ahead of last year’s revenue”
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Overall, General Fund (GF) revenues for the month of June were down -$0.79 million (–0.61%) totaling $128.68 million versus a monthly target of $129.47 million. This shortfall is driven primarily by a down in the Corporate Tax, -$1.59 million ( –9.70%) and the Inheritance and Estate Tax -$1.57 (-80.80%). The Corporate Tax, however, finished a strong year and performed the best of any of the major tax sources.
Along with the Personal Income taxes, the important consumption taxes (Sales and Rooms & Meals) also rebounded modestly. They had taken a significant hit by the warm, rainy weather and poor tourist season last winter.
These shortfalls were mostly offset by modest increases in the remaining General Fund revenue types. The General Fund finishes FY2016 with a preliminary cumulative shortfall of -$16.10 million (-1.13%), $1,412.5 million vs. target of $1,428.60 million.
The Transportation Fund (TF) had non-dedicated receipts for June totaling $29.10 million, missing the monthly target by -$0.05 million (-0.16%), resulting in cumulative year to date receipts of $264.60 million vs cumulative target of 266.70. Compared to the prior fiscal year (FY 2015), the current cumulative results for TF are +$3.21 million, or +1.23% ahead.
The Education Fund (EF) receipts for June were ahead of target by $0.34 million. Sales and Use was up $0.07 million, MV Purchase and Use down -$0.21 million and Lottery revenues were up +$0.51 million. The Education Fund finishes the year at $189.69 million vs. target of $190.20 million. Compared to prior fiscal year (FY2015), the current cumulative results for the EF are +$6.82 million, or +3.73 ahead.
Any effects of FY2016 performance on FY 2017 will be addressed with the release of the July revenue estimates. Final FY2016 revenue results will be available later in the month.
Source: Administration Secretary. 7.15.2016