by Timothy McQuiston, Vermont Business Magazine General Funds were below target for August, while Transportation and Education Funds were above targets, reversing a trend. Personal income tax receipts for many months have been pushing the state into a surplus. But the PI failed to meet expectations by more than $2 million for the month. All three of the major taxes were off for the month. The year-to-date GF target is still ahead of schedule.
Meanwhile, the Sales tax, which has struggled the last few years, was above its target by nearly 3 percent. And the Gasoline and Motor Vehicle Purchase & Use, which have also lagged, made comebacks and beat the year-to-date targets, finally.
“General Fund receipts were below the consensus cash flow target for the month, while Transportation and Education Fund revenues were above target,” stated Administration Secretary Young, who released the numbers Friday morning. “Year to date, which is over the first two months of fiscal year 2020, General Fund revenues remain above target, and in total, the three funds are above their combined expectations. This early in the fiscal year it is premature to draw any conclusions about full-year performance.”
General Fund revenues collected for the month totaled $102.10 million, or -$2.59 million (-2.47%) below the monthly consensus revenue target adopted by the Emergency Board on July 29, 2019. In August, personal and corporate income taxes were below target, while the estate tax exceeded its target. Year-to-date, the General Fund is $2.59 million (1.22%) above its cash flow target.
“Most notable in this month’s shortfall is the corporate income tax performance, missing the monthly consensus cash flow target of $2.5 million by -$2.72 million. This underperformance can be attributed to the faster than expected reconciliations of tax returns by the Tax Department,” explained Young. “These reconciliations, aided by the enhanced technology at the Tax Department, have this year proceeded on a much faster timeline versus past fiscal years resulting in the August receipts underperformance.”
The Transportation Fund collected $25.35 million for the month, $0.93 million (+3.80%) above its target. Year-to-date, the Transportation Fund is $1.11 million (+2.44%) above its target. The Education Fund collected $45.39 million for the month, or $1.26 million (+2.86%) above its target. Year-to-date, the Education Fund is -$0.10 million, (-0.11%) below its target.
Adjusting for redirection of certain health care-related taxes under Act 6 of 2019, for comparison purposes only, in the accompanying General Fund tables, the revenues for August 2019 (FY 2020) represent changes of +2.34%, -0.94%, and +6.30% for the General Fund, Transportation Fund, and Education Fund, respectively, from August 2018 (FY 2019).
