Vermont beats revenue targets in all three funds

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Vermont beats revenue targets in all three funds

Fri, 10/23/2020 - 6:05pm -- tim

Vermont Business Magazine Revenue collections through September 2020 continue to exceed expectations, with the vital personal income tax showing particular strength.

General Fund revenues for the month of September were $165.97 million versus the monthly target of $134.49 million, +$31.49 million or +23.41% above the consensus target. The largest, single above target performance was Personal Income Tax receipts, which were +$22.89 million or +29.20% above the monthly target of $78.39 million.

Corporate Income Tax receipts of $24.03 million were also ahead of target by +$8.90 million, or +58.9%.

Year-to-date General Fund revenues were $572.80 million, +$49.27 million or +9.41% above the consensus target of $523.54 million.

September represents the third month of fiscal year 2021 (FY21). Tax revenues are compared to the current consensus revenue forecast for FY21, as approved by the Vermont Emergency Board on August 12, 2020.

“We continue to see receipts above forecast in both personal and corporate income tax categories, especially in estimated personal income payments which account for +$11.56 million of the +$22.89 million in personal income tax receipts above target,” said Administration Secretary Susanne Young. “Because estimated personal income payments must equal 100% of the prior year’s tax liability or 90% of the current year’s estimated tax liability, the very strong income growth in last calendar year 2019 may account for a significant part of this strong showing in the September Personal Income estimates,” continued the Secretary.

“It is likely at least a portion of those estimated gains will be offset by substantial refunds in April when those estimated payments are trued up to actual income earned in a difficult 2020. We will continue to watch and await future revenue performance for signs of change.”

The Transportation Fund saw mixed, but above target results of +$3.57 million or +15.1% above the monthly target of $27.24 million.

Gas Tax collections, Motor Vehicle Purchase & Use, and Motor Vehicle Fees saw above target results, while the remaining components (Diesel Fuel and Other taxes/fees) fell below target. Gasoline Tax was $7.24 million, +$0.77 million or +11.97% above the monthly target of $6.47 million.

Vehicle Purchase and Use Tax was +$2.73 million or +41.70% above forecast, and Motor Vehicle Fees were ahead of target by +$0.48 million or +6.89%. These above target performances were offset slightly by Diesel and Other (-$0.05 mil-lion and -0.36 million respectively).

Overall, year-to-date Transportation Fund revenue totaled $67.71 million against the cumulative target of $65.76 million, an above target result of +$1.95 million or +2.97%.

Education Fund collections totaled $48.45 million for September, versus the target of $42.44 mil-lion, +$6.01 million or +14.15%, driven by higher than expected Sales & Use, and Purchase & Use receipts.

FY21 year-to-date Education Fund revenue of $148.13 million exceeded the target by +$13.34 million, and the previous September year-to-date total of $139.93 million by +$8.20 million.

“The fact that receipts for the first quarter of this fiscal year exceeded forecasts in all three funds is a positive development,” said Secretary Young. “The forecasts adopted in August, how-ever, were lowered significantly from the January forecast pre-pandemic and the receipts this quarter if viewed against that earlier forecast reflect the current difficult and uncertain economic circumstances presented by the pandemic.”

Source: Administration 10.23.2020