by Timothy McQuiston, Vermont Business Magazine Led by the personal income tax once again, revenue collections for the month of June 2021, the last month of the state fiscal year, exceeded targets for the month and for the year.
The State’s General Fund, Transportation Fund, and Education Fund receipts were a combined $38.8 million, or 18.2 percent for the month. The General Fund alone was ahead of targets for the fiscal year by $197.6 million (11.3 percent). The PI tax is the most important GF revenue source.
The corporate income tax exceeded targets more than any other revenue source. It finished the fiscal year ahead by just over 50 percent. The corporate tax is typically the fourth highest grossing source behind PI, sales, and rooms and meals. But this year it edged out R&M by nearly $20 million. SEE TABLES BELOW.
Secretary of Administration Susanne Young released Vermont’s revenue results for June 2021 on July 23. General, Education, and Transportation Fund revenues were all above monthly consensus expectations from the January 19, 2021, upgraded consensus revenue forecast.
General Fund revenues collected for the month totaled $165.6 million, or $33.1 million above the monthly consensus revenue target.
“Strong receipts in the General Fund were driven by the Personal Income Tax, which cumulatively brought in $124.4 million more than expected from the January consensus revenue forecast,” Young said. “The large surplus will allow us to put away more money in reserves and will, by operation of current law, also add over $52 million to the Vermont State Employees' Postemployment Benefits Trust Fund.”
As part of the deal to shore up the underfunded state employee and teacher retirement funds, the Legislature has mandated that some of the budget surplus go into the benefits fund. The retirement funds for pension and health benefits face a future deficit in the billions ($5.7 billion unfunded retirement liabilities in the pension and retirement plans for unionized state employees and teachers).
The Transportation Fund was $1.31 million, or 4.55 percent, above consensus expectations for the month, bringing in $30.03 million.
Cumulatively in fiscal year 2021, the Transportation Fund receipts total $282.7 million, 2.82 percent above cumulative consensus expectations.
The Education Fund was $4.4 million, or 8.5 percent, above the monthly consensus target, having collected $56.3 million for the month.
Cumulatively in fiscal year 2021, the Education Fund receipts total $620.9 million, 5.3 percent above cumulative consensus expectations from January.
“These revenue results provide a positive backdrop for the upcoming July 30, 2021, consensus revenue forecast to be presented to the Emergency Board. The extraordinary federal financial support, and the resurgent economic activity in Vermont which has contributed to elevated revenues, are likely to continue for at least the near-term, and possibly through most of the two-year consensus forecast update timeframe,” Young said.
The Emergency Board will meet in the Governor’s Ceremonial Office at the Vermont Statehouse on July 30, 2021, at 11 am.
