by Timothy McQuiston, Vermont Business Magazine The State’s General Fund, Transportation Fund, and Education Fund tax receipts in April were a combined $24.7 million, or 7.9 percent below monthly consensus expectations. While there was an explainable dip in actual April revenues compared to the January forecast, cumulative targets, or year to date, were surpassed by a combined $80.5 million, across the three major funds. The GF itself is up 3.8 percent, or $58.2 million, YTD.
For the month of April, General Fund revenues totaled $201.5 million, or $40.1 million below the monthly consensus revenue target.
The personal income tax (the most important GF revenue source), was -36.7 percent, or -$68.4 million, below expectations. The corporate tax (139.3 percent or $23.3 million above) and the meals and rooms tax, 35.5 percent above ($2.4 million), made up some of the ground.
There are two months remaining in Fiscal Year 2021.
“This monthly revenue underperformance largely reflects the delay in the regular filing and payment date for the Personal Income Tax. The date was extended by the IRS, due to the pandemic, from the traditional April 15 deadline to May 17, 2021,” Administration Secretary Susanne Young said. “When the consensus revenue forecast was adopted in January, the IRS had not yet announced the extension and collections anticipated in April reflected the historic increased collection of taxes filed close to the April filing date. With the deadline pushed to mid-May, we expect next month’s revenues will bounce back strongly and exceed the May target.”
On January 19, 2021, the consensus revenue expectations were upgraded substantially for fiscal year 2021 as compared to the August 2020 forecast. They have broadly exceeded the January forecasts until the April results.
General Fund revenues year-to-date are $58.2 million, or 3.8 percent above the cumulative revenue target.
Meanwhile, the Transportation Fund was above targets by 22.9 percent and the Education Fund exceeded targets by 20.7 percent for the month.
Transportation was led by revenues generated by motor vehicle purchases (up 95.7 percent). Education was led by the sales and use tax (up 14.8 percent).
The Transportation Fund was $5.46 million, or 22.9 percent, above consensus expectations for April, bringing in $29.27 million, with the largest increased collections in the motor vehicle purchase and use tax.
The gasoline and diesel fuel revenues have struggled in recent years despite adjustments to expectations. In April, gasoline was up $0.3 million or 5.3 percent while diesel was down $0.1 million or 7.5 percent. While they were only $0.5 million below expectations YTD, they were a cumulative $7.7 million below last year's revenues to this point.
Cumulatively in fiscal year 2021, the Transportation Fund receipts total $227.6 million, up 2.32 percent from cumulative consensus expectations.
Secretary Young said: “Transportation Fund receipts have now caught up with expectations and are slightly ahead of the consensus target for the first time in the second half of fiscal year 2021.”
The Education Fund was $9.99 million, or 20.7 percent, above the monthly consensus target, having collected $58.3 million for the month primarily driven by robust sales and use tax collections (up $5.95 million or 14.8 percent).
The tourism-related meals and rooms tax was up 35.5 percent and up 8.4 percent YTD, it continues to lag against revenues from last year, down $8 million or 21.0 percent.
Young said: “Vermont’s overall spending is up thanks to federal pandemic assistance payments and other aid that has underpinned the recovery to date. Improving consumer confidence amid steadily increasing vaccination rates is essential to create the consumption that fuels revenue receipts.”
Cumulatively in fiscal year 2021, the Education Fund receipts total $17.65 million, 3.6 percent more than cumulative consensus expectations from January.
