Vermont Business Magazine The personal income tax, the most important General Fund revenue source, continues to perform well. And has been the case for several years, it was supported by the tourism-related rooms and meals tax. Secretary of Administration Kristin Clouser released Vermont’s revenue results for December 2021 today.
The Education Fund also exceeded expectations, but once again the long-lingering Transportation Fund continues to under-perform because of fuel tax receipts.
While the overall economic news continues to be good, Clouser is concerned that it is not sustainable.
The state’s General Fund, Transportation Fund, and Education Fund receipts in December were a combined $241.4 million, or 0.8% above monthly consensus expectations. Cumulative revenues remain 2.6% above consensus expectations for the first half of the state’s fiscal year.
General Fund revenues collected for the month totaled $165.9 million, or $1.8 million above the monthly consensus revenue target.
For the six-month period, General Fund revenues were $855.8 million, exceeding their target by $29.0 million or 3.5%.
This month’s revenues were paced by strength in personal income taxes and aided by a positive boost in meals and rooms taxes, which more than compensated for a slight lag in corporate income taxes.
The Transportation Fund was slightly below consensus expectations for December, bringing in $22.6 million compared to the consensus estimate of $23.8 million.
Fiscal year-to-date, the T-Fund brought in $145.0 million which is $1.5 million or -1.0% below the consensus cash flow target.
Revenue into the T-Fund continued the pattern of below target fuel taxes (gas and diesel). In the recent past, fuel tax underperformance has been offset by higher Motor Vehicle Purchase and Use taxes and fees, but December receipts in this category also lagged monthly consensus estimates.
The Education Fund was $1.3 million or 2.5% above the monthly consensus target, having collected $52.9 million for the month.
For the first half of the fiscal year, the Ed Fund received $336.7 million, which is $6.5 million or 2.0% higher than the consensus target. Monthly receipts into the Ed Fund were mixed, with receipts in two major components somewhat upbeat (Meals and Rooms and Sales and Use) while receipts in two other components were soft (Motor Vehicle Purchase and Use and Lottery).
Overall, revenues into the Ed Fund have been healthy.
Monthly receipts in the General Fund and the Education Fund reflect the still upbeat economic conditions that were in place prior to the onset of the most recent uptick in COVID case numbers associated with the COVID Omicron variant. Although T-Fund receipts lagged last month, the monthly under-performance corresponded to only a relatively small amount dollar wise.
“We are pleased with the half-year revenue results relative to the consensus forecast,” stated Secretary Clouser, “however we remain wary of COVID impacts on the economy and we will be watching carefully for potential signs of change.”
