by Timothy McQuiston, Vermont Business Magazine Vermont tax revenues for September were good and bad. The General Fund receipts were over 14% ahead of projections, pushing the entire first quarter to over 12% ahead. However, the Transportation had the opposite result, as revenues lagged 14% below expectations for the month and were nearly 4% below for the quarter, as both fuel taxes and vehicle sales, especially, faltered. The Education was just below breakeven for the month and is nearly 4% above expectations for the year-to-date.
Secretary of Administration Kristin Clouser released Vermont’s revenue results for September 2022 today.
Overall, the State’s General Fund, Transportation Fund, and Education Fund receipts in August were a combined $314.9 million, or 8.4%, above monthly consensus targets. For the first quarter of the state’s fiscal year, combined revenues across all three funds were 8.3% above target.
General Fund revenues collected for the month totaled $231.3 million, $29.0 million above the monthly consensus cash flow revenue target.
For the first quarter, General Fund revenues were $56.2 million, or 12.1%, above consensus.
Positive receipts activity over the month and the quarter were paced by two income tax sources – personal income taxes and corporate income taxes. Both sources registered substantial gains, enough to bury minor misses in estate taxes and health care revenues. PI is by far the most important GF revenue source.
Revenues into the Transportation Fund lagged monthly consensus expectations, bringing in $24.4 million in September, $4.1 million below the consensus cash flow target estimate.
For the quarter, receipts underperformed consensus expectations by $2.9 million, or -3.7%.
Although revenues from the T-Fund’s two major fuel tax components were weak across the entire first quarter, the downside misses in the non-fuel revenue sources (motor vehicle purchase & use taxes, and fees) came late in the quarter and may signal the beginning of a Federal Reserve-induced slowdown in the broader economy.
Education Fund revenues last month were $0.4 million, or 0.7%, below the monthly consensus cash flow target, having collected $59.2 million in September.
Over the quarter, however, the Education Fund comfortably outperformed the consensus estimate by $6.5 million, or 3.7%. Last month appeared to be a lull in what otherwise was a very strong quarter for the Ed Fund.
Whether this represents a new, more modest trend in consumption taxes, or merely a break in the action prior to the holiday season, remains to be seen.
Revenue data for the first quarter of the state’s fiscal year show positive receipts performance in the aggregate, while ending on a cautionary note for the Transportation Fund. According to Secretary Clouser: “Despite the overall upbeat assessment of state revenues over the first quarter, receipts activity was not without stains, most notably in the T-Fund, but also with a few of the sub-categories in the other funds. That said, the state came through the first important milestone of the fiscal year on a high note despite uncertainty in the economic and revenue outlook in the remaining three quarters of the fiscal year.”
