Vermont Business Magazine Secretary of Administration Susanne Young today released Vermont’s revenue results for February 2021. They show that General and Education Fund revenues came in above target, while the Transportation Fund revenues came in below target.
The state’s General Fund, Transportation Fund, and Education Fund receipts were a combined $32.82 million, or 23.8 percent above monthly consensus expectations.
On January 19, 2021, the consensus revenue expectations were upgraded substantially for fiscal year 2021 as compared to the August 2020 forecast.
General Fund revenues collected for the month totaled $108.65 million, or $31.4 million above the monthly consensus revenue target.
Notably, the comparable numbers from last year are all pre-pandemic.
For the current fiscal year, the personal income tax continues to roar along, but could face some adjustment as tax returns and, therefore, refunds influence the final numbers.
Meals and rooms taxes are predictably down as COVID restrictions limited the summer, fall and ski seasons. Gasoline sales also slumped. However, motor vehicle sales increased, which is a positive economic indicator.
Other smaller taxes also were above expectations, such as liquor & wine and the bank franchise taxes. Both are probably COVID-related. The latter due to much activity brought on by federal stimulus programs like the EIDL and PPP administered by the SBA and managed by local lending institutions.
Young explained: “Higher than expected General Fund revenues are the result of fewer refunds in the Personal Income Tax going out in February than anticipated. The later start to the opening of the filing season by the IRS this year reduced the volume of claims processed, and hence refunded by the Vermont Tax Department in February. The recent extension of the filing deadline to May 17 by the IRS extends the time frame for refunding as well, creating uncertainty in the monthly consensus expectations in the short term.”
The Transportation Fund was $2.7 million, or 15.5%, below consensus expectations for the month, bringing in $14.77 million. Secretary Young stated: “Transportation Fund receipts were adversely impacted by the month being short and ending on a weekend, and initial March receipts indicate that some receipts were pushed into March.”
The Education Fund was $4.1 million, or 9.5%, above the monthly consensus target, having collected $47.2 million for the month. Secretary Young noted: “Federal fiscal COVID relief assistance is buoying consumption expenditure activity. Compared to the temporary bounce in the General Fund, the factors boosting the Education Fund look to be more fundamental and lasting, particularly given the recent passage of the American Rescue Plan by Congress.”
According to Secretary Young, “The temporary impacts of delayed filings in both the General and Transportation funds indicate that some level of catch-up is likely in coming months. But the factors supporting the Education Fund’s above-expectations receipts are more likely to be sustained with ongoing federal and State stimulus spending.