Vermont Business Magazine Vermont economists are suggesting that there could be an "April Surprise" in tax revenues, as income tax filers realize that they owe more in taxes this year because they earned more than expected. But it's not April yet and the January revenue results released this morning revealed another disappointing month for the vital personal income tax. The revenue targets are based on the recently revised Consensus Revenue Forecast adopted by the Vermont Emergency Board on January 20, 2015. Preliminary General Fund (GF) revenues totaled $153.39 million for January 2015, -$1.28 million or –0.83 percent below the monthly target. Year-to-date, GF receipts are $797.34 million, -$1.28 million or –0.16 percent below the cumulative target. The results are +$23.84 million or +3.08 percent above the year-to-date results of the prior fiscal year (FY 2014).
Most of the consumption taxes did well, except for the gasoline tax. The gas tax is based on a combination of gallonage and total sales. With gas prices falling steeply last year, the sales portion of the tax suffered, but as consumers found more money in their pockets, they drove more and the per-gallon share was able to overcome that loss in December, likely because of holiday driving by tourists. But its drop in January dragged down the Transportation Fund. The sales and rooms & meals taxes were both ahead of schedule. Economists believe consumer activity will benefit greatly from a fall in gasoline prices through the first half of this year and improve consumer confidence for perhaps an extended period time. This, they say, could accelerate what has been a sluggish recovery from the Great Recession.
Secretary of Administration Justin Johnson, whoreleased the preliminary January fiscal year (FY) 2015 revenue results for the General, Transportation, and Education Funds said, “Although we are slightly behind the consensus forecast for January, GF revenues remain more than 3% ahead of last year. While Personal Income Tax receipts fell behind the monthly target, they were offset by above-target performance in Corporate Income Tax, Insurance receipts and the two consumption taxes (Sales & Use and Rooms & Meals).”
The Transportation Fund came in less than 1% below the monthly target. For the month of January, preliminary revenues finished at $19.01 million, -$0.13 million, or –0.68% short of the target. On a cumulative basis, TF revenues were $147.21 million, -$0.13 million or –0.09% below the cumulative target. Compared to the prior fiscal year (FY 2014), TF revenues were +$4.69 million or 3.29% ahead.
The Education Fund fell slightly below the target for the month of January 2015. Preliminary EF revenue finished at $19.30 million, -$0.21 million, or -1.07%, short of its monthly target. Year-to-date EF revenues were $108.95 million or –0.19% below the cumulative target. As compared to the prior fiscal year, January EF results were +$3.69 million or +3.51% higher than the same period for FY 2014.
Johnson concluded, “Clearly we would have preferred to meet the January targets in all three major funds. However, we are just one month into the revised forecast period and will wait to see how receipts progress, as we enter the busy income tax filing season.”
