Personal Income pushes tax revenues ahead of targets

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Personal Income pushes tax revenues ahead of targets

Fri, 03/10/2017 - 1:02pm -- tim

Vermont Business Magazine Personal Income tax revenues were well ahead of targets last month (21.4 percent) and are now ahead of fiscal year targets and last year’s totals (+$16.7 million). The PI is the state’s most important revenue source and had been suffering for the last two years. However, the Corporate tax, the state’s fourth most important, continues to slide (-$3.9 million behind monthly targets), especially against last year’s impressive performance (-$12.8 million). The Sales Tax, number two on the list ahead of Rooms & Meals, has been limping along (down $1 million for the year), which also affects the Education Fund.

The Education Fund, meanwhile, stayed ahead of targets as Lottery revenue was up over 27 percent. Meanwhile, Gasoline and Diesel taxes dragged down the Transportation fund.

Revenue collections for the month of February 2017 were compiled per Secretary of Administration, Susanne Young and released Friday morning.

General Fund revenues collected for the month of February totaled $104.55 million, +$11.31 million above the consensus revenue targets adopted by the Emergency Board on January 19, 2017. This positive performance in February was driven primarily by better than expected results in Personal Income Tax of +$7.05 million and Corporate Income Tax of +3.93 million. February marks the 8th month of FY2017. Through these first 8 months, total receipts for the General Fund are $14.43 million ahead of projections, $954.95 million vs. a target of $940.52 million.

Secretary Young stated, “At this point, it is too early to tell if the positive Personal Income and Corporate Income results are anything more than a difference in month to month timing differences in tax refunds. Consistent with the IRS’s experience, increased and varied fraud threats have delayed the release of Vermont tax refunds to allow time to implement fraud prevention tools. Month over month refund timing issues will generally offset by the end of April, allowing for a clearer measurement of net Personal and Corporate Income tax receipts.”

The Transportation Fund collected $17.31 million for the month of February, -$1.10 million below its $18.41 million target. This under performance was driven by a down in the Gasoline Tax, Motor Vehicle Fess and Other Taxes of -$0.29 million, -$0.58 million and -$0.38 million respectively. Year to date, receipts in the Transportation Fund are $170.06 million vs. a target of $170.84.

The Education Fund collected $13.88 million for the month of February, $0.49 million ahead of its $13.39 million target.

Compared to revenues collected at this point in State fiscal year 2017, there is an increase of 4.48%, or +$40.97 million in the General Fund, a 2.69%, or $4.46 million increase in the Transportation Fund, and a –0.63%, or -$0.80 million decrease in the Education Fund.