Vermont Business Magazine The State’s General Fund, Transportation Fund (T-Fund), and Education Fund receipts in July were a combined $227.0 million, or 2.8%, above monthly consensus expectations.
The General Fund, Education Fund and even the Transportation Fund all finished the month with revenues above target, marking a strong start for the new fiscal year.
The sales tax, with feeds the Ed Fund, was particularly strong (plus 8.5%).
General Fund revenues collected for the month totaled $136.6 million, $0.6 million above the monthly consensus cash flow revenue target.
The July numbers carry the momentum of previous months on personal and corporate income taxes as well as a few of the smaller revenue categories.
The corporate income was particularly strong (plus 18.25%), while the personal income, which has been very robust, had a more modest month (plus 3.1%). The tourism-related rooms & meals tax, which also has been strong, was below targets (minus 3.55%) as set by state economists.
Revenues into the Transportation Fund exceeded monthly consensus expectations, bringing in $23.6 million in July, $0.8 million above the consensus monthly cash flow target estimate.
This reverses a string of lagging months for the T-Fund. Performance in the various categories was mixed, with gas tax underperformance balanced out by above consensus performance in diesel taxes and purchase & use taxes. The T-Fund’s Other Fees category also had a strong month.
The Education Fund revenues were $4.9 million, or 7.9%, above the monthly consensus cash flow target, having collected $66.8 million in July.
Strong performance was to be expected given the still largely positive pace to retail and visitor activity in Vermont.
Consumption tax revenue came in strong, a pattern that is likely to continue over the short term absent a significantly negative shift in the economy.
State revenues for the first month of Fiscal Year 2023 remain on solid ground, which is a relief given the recent turmoil in the asset markets and the Federal Reserve’s intention to moderate demand-driven inflation, according to Administration Secretary Kristin Clouser.
“It’s always preferable to begin the fiscal year with a small cushion to soften the inevitable bumps down the road. We are pleased to see a good start to the year, although we remain mindful that we have benefited from a very strong wind at our back which may not continue,” Clouser said.
