State tax revenues came in above targets in August

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State tax revenues came in above targets in August

Fri, 09/17/2021 - 5:04pm -- tim

Vermont Business Magazine The state’s General Fund, Transportation Fund, and Education Fund receipts were a combined $13.25 million, or 6.97 percent above monthly consensus expectations from the July 30, 2021 updated consensus revenue forecast.

General Fund revenues for the month totaled $122.25 million, or $11.5 million above the monthly consensus revenue target, as the personal income tax bounced back from July.

Secretary of Administration Susanne Young released Vermont’s revenue results for August 2021 today.

“Personal income and rooms and meals taxes, the latter of which is a consumption-based tax, drove the strong August performance,” said Secretary Young. “We remain concerned about the extent to which these strong revenues reflect Vermont’s underlying economy or extraordinary and one-time Federal deficit spending on the pandemic response. For example, Vermont’s job count has only recovered to about 80 percent of the pre-pandemic level and the state’s labor force has similarly struggled, contracting by nearly eight percent, or 27,000 people, since February of 2020,” Secretary Young added.

The Transportation Fund was $709,600, or 2.7%, below the consensus expectations for the month, with $25.3 million in revenues during August.

The Education Fund (excluding property taxes) finished August $2.4 million, or 4.6% above the monthly consensus target, with $55.87 million in total receipts for the month. Lottery proceeds exceeded their target by $2.1 million in August, making up most of the Education Fund’s overperformance.

“Federal stimulus spending continues to have a big impact on Vermont’s revenues,” said Secretary Young. 

“However, this money will not circulate through Vermont’s economy forever. Some programs, like Pandemic Unemployment Assistance (PUA) have already expired. If we are going to capitalize on this investment from the Federal Government to address critical needs, like broadband, climate resilience, water quality, and housing – all of which will strengthen Vermont’s underlying economy – we must look at this revenue performance as one time, because our fiscal fundamentals do not currently substantiate this level of revenue or spending on a year-over-year basis,” Secretary Young added.