Secretary of Administration Neale F Lunderville announced today that Vermont’s February Revenue Figures were down substantially, especially for the General Fund, which was below the monthly target by nearly $10 million or 17.6 percent lower than anticipated. The General Fund revenues were off $15 million or 2.2 percent for the fiscal year to date. The Transportation Fund was also below the forecast for the month by $520,000 or 3.7 percent and for the year down by one-half percent. The Education Fund was up slightly for the month at $170,000 or 1.6 percent and just barely broke even for the year to date.
General FundFebruary is the 8th month of FY 2010. General Fund revenues totaled $44.82 million for February 2010, -$9.59million or -17.63% below the $54.41 million consensus revenue forecast for the month. Year to date, General Fund revenues of $673.47 million were -$15.00 million or -2.18% below the year to date FY 2010 target of $688.47 million.February’s are the second monthly results utilizing the revised FY 2010 Consensus Revenue Forecast, approved by the Emergency Board at their January 13, 2010 meeting. Statutorily, the State is required to revise the Consensus Revenue Forecast two times per year, in January and July; the Emergency Board may schedule interim revisions if deemed necessary.Personal Income Tax receipts are the largest single state revenue source, and are reported Net-of-Personal Income Tax refunds. Personal Income Tax receipts for February finished down -$5.38 million off a target of +0.40 million, which is -$5.78 million or -1447.92% behind the monthly target. The shortfall was due primarily to reduced withholding taxes (-$2.92 million) and increased refund activity (-$4.42 million).“We are very concerned that personal income fell below target in February,” said Secretary Lunderville. “This is the second month in a row where personal income totals failed to meet expectations following the latest consensus forecast. The General Fund is off $15 million since January, a trend that indicates that the State may not be able to make up lost ground this fiscal year. There will be implications for both the FY 2010 and FY 2011 budgets.”Corporate Income Taxes, which are also reported net-of refunds, were above target for February with receipts of $0.79 million against a target of $0.49 million or +$0.30 million (+60.42%). The consumption taxes were at or above target for the month. Sales & Use Tax, was equal to the target at $15.45 million, and Rooms & Meals Tax receipts of $9.51 million exceeded target by +$0.24 million (+2.58%) for February.The year to date results for the four major General Fund categories are as follows: Personal Income Tax, $315.28 million (-3.73%); Sales & Use Tax, $143.89 million (+0.16%); Corporate, $31.73 million (+0.53%); and Meals & Rooms Tax, $80.81 million (+0.51%).The remaining tax components include Insurance, Inheritance & Estate Tax, Real Property Transfer Tax, and “Other” (which includes: Bank Franchise Tax, Telephone Tax, Liquor Tax, Beverage Tax, Fees, and Other Taxes). The results for the month of February were as follows: Insurance Tax, $19.93 million (-13.46%); Estate Tax, $0.16 million (-87.44%); Property Transfer Tax, $0.40 million (+2.80%); and “Other”, $3.96 million (-3.12%). Year to date results for these categories were: Insurance Tax, $37.53 million (-7.85%); Estate Tax, $9.32 million (-15.78%); Property Transfer Tax, $5.36 million (+1.67%); and “Other”, $49.55 million (+2.59%).
Transportation FundSecretary Lunderville also reported on the results for the non-dedicated Transportation Fund Revenue, with receipts of $13.51 million for the month or -$0.52 million (-3.69%), below the monthly target for February of $14.02 million. The year to date non-dedicated Transportation revenue was $132.02 million versus the target of $132.68 million (-$0.66 million, -0.50%).February results showed above target receipts in all categories, except Gasoline Tax. The Transportation Fund revenue results for February were: Gasoline, $3.52 million or -18.43% below target; Diesel Tax, $1.18 million or +1.51% above target; Motor Vehicle Purchase & Use Tax, $2.47 million or 2.35% above target; Motor Vehicle Fees, $4.74 million or +0.55% above target; and Other Fees, $1.59 million or +12.60% above the monthly target. The February year to date Transportation Fund revenue results were: Gasoline, $40.73 million or -1.56% below target, Diesel Tax, $9.82 million or +1.60% above target; Motor Vehicle Purchase & Use Tax, $27.84 million or -0.13% below target; Motor Vehicle Fees, $42.23 million or -0.17% below target; and Other Fees, $11.40 million or -0.53%, short of target. “The shortfall in the Transportation Fund occurred in Gasoline Taxes and is likely the result of the payment due date falling on a weekend, which can skew final tallies. At this point, we expect to make up most, if not all, of the slippage in Gasoline Tax in March,” said Secretary Lunderville.
Secretary Lunderville also reported on the results for the Transportation Infrastructure Bond Fund (“TIB”). TIB Fund Gas receipts for February were $0.87 million or -19.89% below target – also due to the month end timing. Year to date, TIB Fund Gas receipts were $8.26 million or -2.70% short of target. The TIB Fund Diesel receipts were $0.19 million or +35.57% above target for the month; year to date TIB Diesel receipts were $0.45 million or -1.98% behind target. The TIB Fund receipts are noted below the following table:
Education FundSecretary Lunderville released revenue results for the “the non-Property Tax” Education Fund revenues (which constitute approximately 11% of the total Education Fund sources). The non-Property Tax Education Fund receipts for February totaled $10.98 million, or +$0.17 million (+1.57%) above the $10.81 million revised Consensus Revenue target for the month. Year to date, Education Fund revenues were $98.79 million or +0.07% ahead of target.The individual Education Fund revenue component results for February were: Sales & Use Tax, $7.72 million – essentially on target; Motor Vehicle Purchase & Use Tax, $1.24 million or +2.36%; Lottery Transfer, $2.02 million or +8.04%; and Education Fund Interest, $0.00 million or -100.00%. Year-to-date results were: Sales & Use Tax, $71.95 or +0.16%; Motor Vehicle Purchase & Use Tax, $13.92 million or -0.13%; Lottery Transfer, $12.86 million or –0.12%; and Education Fund Interest, $0.07 million or -18.03%.
Conclusion“For months we have cautioned that the risk is firmly on the downside, meaning that we must be prepared for things to get worse before they get better,” said Secretary Lunderville. “After two months of weak revenues, especially in key indicators like personal income receipts, it’s clear that Vermont’s economic recovery is moving more slowly than anticipated.”Lunderville concluded: “We must remember that General Fund receipts year to date are nearly $62 million below the same period for fiscal 2009 – and fiscal 2009 was a bad year. As revenues slip even further, the need for sustainable budget reductions becomes more evident. Since recovery to pre-recession levels is at least two years away, we must curb spending to meet reduced revenues for the next several fiscal years. Now is not the time to rely on one-time patches or tax increases, both of which will slow our recovery and speed an exodus of businesses and taxpayers from Vermont.”