Vermont Business Magazine After several months of strong results, personal income tax revenues fell last month and dragged down total General Fund revenues. Secretary of Administration Susanne Young today released Vermont’s Revenue Results for December 2018. Along with the General Fund, the Transportation Fund was below its monthly target. Both funds, however, remain above their cumulative target due to the strength of revenues over the first half of the fiscal year. The Education Fund was above its monthly target but remains slightly below its cumulative annual target.
General Fund tax revenues collected for the month totaled $108.91 million, or -$9.95 million below the monthly consensus revenue target. Year-to-date, fiscal year 2019 General Fund revenues are $20.41 million, or 3.54%, above expectations.
“General Fund performance was lower than forecast in December, primarily as a result of lower-than-expected personal income tax estimated payments,” stated Secretary Young. “General fund collections remain above the cumulative consensus cash flow target, but we will be watching January collections closely with particular attention to personal income tax estimated payments. The Administration looks forward to meeting with the economists from the State and Legislature at the Emergency Board meeting on January 22 and hearing their assessment of the State’s overall revenue picture for the current and next fiscal years.”
The Transportation Fund collected $21.28 million for the month of December, or -$0.40 million below target. The under-performance in receipts relative to the December monthly consensus cash flow target in Motor Vehicle Fees and Purchase & Use Tax receipts were primarily responsible for the lower-than-expected performance. This fiscal year-to-date, however, the Transportation Fund remains above target by $1.84 million, or 1.34%.
The Education Fund collected $41.49 million for the month, or $1.99 million above target. The strong performance in December further reduced the Education Fund’s year-to-date under-performance; currently the Education Fund is -$0.24 million, or -0.09%, slightly below expectations.
“Once again, it was good news to see the Sales and Use Tax bounce back and exceed its target in December after missing its target earlier in the year,” noted Young. "At this point in the year, the Sales and Use tax is within -0.55% of its cumulative consensus cash flow target.”
The State’s three largest funds, in the aggregate, are above their cumulative consensus target by $22.01 million over the first six months of fiscal year 2019. On a year-over-year basis, after adjusting for legislative changes noted below, the three funds in aggregate continue to reflect solid gains in a broad range of tax categories. Adjusting these changes, for comparison purposes only, the year-to-date fiscal 2019 revenues represent increases of 8.37%, 2.03%, and 5.13% for the General Fund, Transportation Fund, and Education Fund, respectively, from the corresponding first six months of fiscal 2018. Personal Income tax - the largest component of the General Fund - increased by 3.05% over the corresponding period in fiscal 2018.
The Emergency Board will meet on Tuesday, January 22, 2019 at 1:00 p.m. in the Governor’s Ceremonial office at the Vermont State House.
Note: Act 11 of 2018 made several key changes to existing State revenue and expenditure distributions effective July 1 and implemented in the current fiscal year. The most significant changes were the shift of the entirety of the Sales and Use tax and 25% of the Meals and Rooms tax from the General Fund to the Education Fund, offset by the elimination of a lump sum annual transfer of General Fund dollars to the Education Fund.
Source: Administration 1.18.2019