by Timothy McQuiston, Vermont Business Magazine Tax revenue collections for the month of May 2021 vastly exceeded projections. The state’s General Fund, Transportation Fund, and Education Fund receipts were a combined $116.5 million, or 76.3 percent above monthly consensus expectations from the January 19, 2021, upgraded consensus revenue forecast.
General Fund revenues collected for the month totaled $192.8 million, or $106.2 million above the monthly consensus revenue target.
The personal income tax, which is the state’s most important revenue source, exceeded expectations by nearly 250 percent.
“This monthly revenue performance reflects the delay in the regular filing and payment date for the Personal Income Tax due to the extension of the filing deadline from April to May. The IRS announced the delay after the January forecast was adopted by the Emergency Board,” said Secretary of Administration Susanne Young.
Meanwhile, the tourism-related rooms & meals tax was ahead by nearly 50 percent. This indicates that people were willing to spend disposable income. The sales & use tax was ahead by over 20 percent, indicative of consumer activity.
General Fund revenues year-to-date are $164.4 million, or 10.1 percent above the cumulative revenue target, and already exceed the consensus forecast for fiscal year 2021 by $32.0 million. The current fiscal year ends June 30.
“General Fund revenue received for the month of June will now add to the general fund surplus at the 2021 fiscal year end,” stated Young. “We are optimistic that the one-time appropriations in the recently enacted budget that were contingent upon anticipated surplus will be fully funded, including $11 million for brownfields remediation, $8.82 million for economic development, $40 million for housing and conservation, and $23.18 million for state technology modernization.”
The Transportation Fund was $1.27 million, or 5.34 percent, above consensus expectations for the month, bringing in $25.12 million. Cumulatively in fiscal year 2021, the Transportation Fund receipts total $252.7 million, up 2.62 percent from cumulative consensus expectations.
However, motor vehicle fees continue to be sluggish even as motor vehicle sales have rebounded (up over 22 percent for the month and ahead nearly 30 percent versus last year), as the pandemic wanes in Vermont.
The Education Fund was $9.09 million, or 21.5 percent, above the monthly consensus target, having collected $51.3 million for the month. Cumulatively in fiscal year 2021, the Education Fund receipts totaled $26.7 million, or 4.97 percent, more than cumulative consensus expectations from January.
“Several factors continue to boost receipts in the State’s three major funds: the extraordinary influx of Federal pandemic assistance and other aid, more Vermonters getting vaccinated each day, and rising consumer confidence,” noted Secretary Young. “Based on revenue receipts received thus far this fiscal year, we expect that final total revenues at the end of June for the General, Transportation, and Education Funds will significantly exceed expectations for fiscal year 2021.”
Source: Montpelier, VT - Secretary of Administration 6.16.2021