by Timothy McQuiston, Vermont Business Magazine The General Fund, Transportation Fund and Education Fund all failed to achieve their respective consensus tax revenue targets in July. The personal income tax again fell below expectations, but the corporate income tax, which had been strong, also was below expectations in the General Fund. Meals & Rooms, also a large revenue source, was also down.
At least part of those downside receipts misses appeared tied to the State’s July flooding event, according to Secretary of Administration Kristin Clouser.
Clouser released Vermont’s revenue results today. July is the first month of the new 2024 state fiscal year.
The State’s General Fund, Transportation Fund, and Education Fund receipts were a combined $229.5 million, missing the $235.0 million monthly consensus target by $5.5 million, or -2.3%.
General Fund revenues for July totaled $143.9 million, ($3.9) million, or -2.7%, below the $147.8 million monthly consensus cash flow target. Personal Income Tax receipts failed to meet their $81.4 million monthly consensus cash flow target, missing by -$5.3 million or -6.5%, which marked the sixth month where monthly Personal Income Tax receipts failed to meet their monthly target.
Corporate Income Tax revenues missed their $7.3 million monthly consensus cash flow target by -$1.2 million, or -15.9%. Revenues in the Meals and Rooms Tax also missed its $14.3 million target by -$0.8) million, or -5.8%.
Other Receipts missed their $11.7 million target on the downside by -$2.4 million or -20.1%. In contrast, July revenues in the Health Care Taxes component showed positive results, finishing the month of July at +$0.5 million (or +0.6%) ahead of its $29.3 million monthly consensus cash flow target. The Insurance Tax also exceeded its $0.8 million target by $0.2 million, 22.0%, and the Estate Tax surpassed its $1.8 million target by $3.7 million, 212.9%.
Revenues in the Transportation Fund fell short of their $22.7 million July consensus target by -$0.5 million, or -2.2%. While revenues for both the Gasoline and Diesel Taxes were essentially on target for July, at $6.1 million and $1.4 million, respectively; receipts in the Motor Vehicle Purchase and Use Tax’s tracked at +$0.2 million, or +2.3%, above its $6.6 million target.
However, those positive receipts performances during July were not enough to overcome the downside misses experienced by the Transportation Fund’s two Fee revenue categories. Motor Vehicle Fees were -$0.6 million, or -8.0%, below their $7.1 million monthly consensus cash flow target and Other Fees were -$0.1 million, or -8.5%, below their $1.4 million consensus monthly target for July.
Education Fund revenues missed their $64.5 million July consensus cash flow target by -$1.1 million, or -1.7%. Receipts in the Sales and Use tax exceeded the $55.0 million consensus cash flow target by $0.1 million, 0.2%. Revenues in the Motor Vehicle Purchase and Use Tax were essentially on-target for the month (at +$0.1 million or +2.3%) relative to its $3.3 million monthly consensus cash flow. Neither of these, however, were enough to overcome the -$0.3 million, or -5.8% downside miss by the Meals and Rooms tax relative to its $5.2 million monthly consensus cash flow target and the failure of the Lottery transfer to make its long-standing July transfer of $1.0 million in receipts.
According to Secretary Clouser: “This month’s data has to be viewed skeptically given the tax filing and tax payment forbearance measures associated with the July flooding event. As state and federal aid is disbursed to those in need, and administrative processes return to standard operations, the impacts of this event will gain more clarity. Nonetheless, the State must invest its resources prudently and balance the immediate needs from the current disaster with the investments necessary to prosper in fiscal year 2025 and beyond.”
Source: 8.31.2023. Montpelier, VT - Secretary of Administration