Secretary of Administration Neale F Lunderville announced today that Vermont’s October revenue figures were above the General Fund target, but were below for both the Transportation and Education funds. While the vital personal income tax was virtually flat during the month and for the year-to-date, corporate income taxes well exceeded targets. Meanwhile, a general sluggishness in motor vehicle purchases and fees and diesel fuel revenues reflect a general sluggishness in the economy.
General Fund
Lunderville released the October 2010 General Fund Revenues today. October is the fourth month of fiscal year (FY) 2011. General Fund revenues totaled $92.28 million for October 2010, and were +$1.27 million or +1.40% above the $91.01 million consensus revenue forecast for the month. Year-to-date General Fund performance of $373.93 million was +$13.71 million, or +3.81% ahead of year to date target of $360.22 million. As was the case last month, this +$13.71 million overage is almost fully attributable to one-time bank franchise receipts in August and likely one-time corporate income tax receipts in September.
The monthly targets reflect the revised Fiscal Year 2011 Consensus Revenue Forecast approved by the Emergency Board at their July 14, 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. The next Emergency Board meeting will be scheduled for January 2011.
Personal Income Tax (PI) receipts are the largest single state revenue source, and are reported Net-of-Personal Income Tax refunds. Personal Income Tax receipts for October were recorded at $47.98 million, or -$0.01 million or -0.02% below the monthly target of $47.99 million.
Corporate Income Taxes for October, which are also reported net-of refunds, were recorded at $3.70 million against a target of $2.78 million, or +$0.93 million (+33.34%) above target.
The consumption taxes experienced mixed results for October; Sales & Use Tax receipts of $20.17 million exceeded the monthly target by +$0.12 million (+0.60%), while Rooms & Meals Tax receipts of $10.66 million fell below target by -$0.02 million (-0.21%).
The year to date results for the four major General Fund categories are as follows: Personal Income Tax, $181.65 million (-0.03%); Sales & Use Tax, $73.73 million (+0.75%); Meals & Rooms Tax, $44.74 million (-0.04%); and Corporate, $26.71 million (+55.78%). Secretary Lunderville noted that, ‘As was the case last month, approximately $7.2 million of the favorable year to date Corporate Income Tax results was associated with a very small number of corporate estimated payments. We remain concerned that these estimated payments may be overstated and that some portion will be refunded when corporate income tax returns are filed. Our economist views this above target result as a one-time event and not indicative of an economy improving more quickly than expected.’
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 October were as follows: Insurance Tax, $021 million (-32.26%); Estate Tax, $1.05 million (-22.24%); Property Transfer Tax, $0.77 million (+3.32%); and ‘Other’, $7.74 million (+8.95%). Year to date results for these categories were: Insurance Tax, $8.49 million (+0.45%); Estate Tax, $3.72 million (-29.86%); Property Transfer Tax, $2.82 million (-11.42%); and ‘Other’, $32.06 million (+21.09%). The majority of the favorable year to date results in the ‘Other’ category were due to unanticipated settlement activity in August in Bank Franchise Taxes.
Transportation Fund
Secretary Lunderville also reported on the results for the non-dedicated Transportation Fund Revenue for October. Total non-dedicated Transportation Fund receipts of $18.01 million for the month were slightly below target by -$0.46 million (-2.47%), against the monthly target of $18.46 million. The year to date non-dedicated Transportation revenue was $72.50 million versus the target of $72.94 million (-$0.43 million, -0.59%).
Individual Transportation Fund revenue receipts components for October were: Gasoline Tax, $5.55 million or +7.10% ahead of target; Diesel Tax, $1.25 million or -12.38% short of target; Motor Vehicle Purchase & Use Tax, $4.32 million or +1.30% above target; Motor Vehicle Fees, $5.55 million or -8.16% behind target; and Other Fees, $1.34 million or -13.56% short of the monthly target. The October year to date Transportation Fund revenue results were: Gasoline Tax, $21.65 million or -1.29% short of target, Diesel Tax, $4.81 million or -1.49% below target; Motor Vehicle Purchase & Use Tax, $16.74 million or -2.16% below target; Motor Vehicle Fees, $23.61 million or +2.78% above target; and Other Fees, $5.69 million or -5.73% short of target.
Secretary Lunderville also reported on the results for the Transportation Infrastructure Bond Fund (’TIB’). TIB Fund Gas receipts for October were $1.57 million or +18.03% above target; year to date receipts of $5.76 million were -0.99% below target. TIB Fund Diesel receipts were $0.06 million or -62.05% below target for the month; year to date TIB Diesel receipts were $0.56 million or -4.23% behind target. TIB Fund receipts are noted below the following table:
Education Fund
The ‘non-Property Tax’ Education Fund revenues (which constitute approximately 11.9% of the total Education Fund sources) were released today by Secretary Lunderville. The non-Property Tax Education Fund receipts for October totaled $13.81 million, or -$0.06 million (-0.43%) short of the $13.87 million target for the month. Year to date Education Fund revenues were $51.10 million or -0.37% behind the year to date target of $51.29 million.
The individual Education Fund revenue component results for October were: Sales & Use Tax, $10.09 million, or +0.60% ahead of target; Motor Vehicle Purchase & Use Tax, $2.16 million or +1.30%; Lottery Transfer, $1.57 million or -6.29%; and Education Fund Interest, under $0.01 million against a target of $0.04 million (-94.75%). Year-to-date results were: Sales & Use Tax, $36.86 million or +0.75%; Motor Vehicle Purchase & Use Tax, $8.37 million or -2.16%; Lottery Transfer, $5.85 million or -4.32%; and Education Fund Interest, $0.02 against a target of $0.03million (-35.11%).
Conclusion
‘The loss of momentum in the economic recovery continues to cause concern about the stability of the recovery,’ said Secretary Lunderville.
‘Compared to prior fiscal years, October year-to-date results for fiscal year 2011 have exceeded fiscal year 2010, but remain 2.9% below fiscal year 2009 and 2.3% below fiscal year 2008 for the same four-month period,’ continued Lunderville. ‘The current forecast does not project a return to fiscal year 2008 revenue levels until fiscal year 2013.’
‘The year-to-date General Fund results are 3.81% ahead of target. However, adjusting for the $12.1 million in one-time activity, the results through October would be 0.4% ahead of target,’ Lunderville concluded. ‘While we are pleased that our current Consensus Forecast will hold until the January 2011 revision, we do not see the current results as an indication of the economic recovery surging ahead.’