Vermont Business Magazine Secretary of Administration Kristin Clouser today released Vermont’s revenue results for October 2022. All three major funds - the General Fund, the Transportation Fund and the Education Fund - ended the month with revenue above target.
Year to date, the General Fund and the Education Fund remain ahead of target while the Transportation Fund is slightly behind.
The crucial personal income tax showed continued strength to lead the revenue results. Meanwhile, the rise in interest rates is starting to show its effects on other data points. The PI is a whopping 16 percent ahead of expectations.
Revenue collections for the month of October 2022 have been compiled. The State’s General Fund, Transportation Fund, and Education Fund receipts in October were a combined $253.9 million, or 2.0%, above monthly consensus expectations.
For the first four months of the state’s fiscal year, combined revenues across all three funds were 6.7% above combined consensus target.
General Fund revenues collected in October totaled $160.8 million, $3.4 million above the monthly consensus cash flow revenue target. Year to date, General Fund revenues were $59.6 million, or 9.6%, above consensus.
Positive receipts activity over the month was mostly due to substantial strength in personal income taxes and, to a lesser extent, solid receipts in meals and rooms taxes.
Corporate income taxes were actually negative for the month, which is largely the result of a “trueing up” with September’s outsized gains. Corporate tax receipts are worth watching carefully as rising interest rates may take their toll on retail sales and corporate profits.
Revenues into the Transportation Fund beat monthly consensus expectations, bringing in $27.1 million in October, $0.6 million above the consensus cash flow target estimate.
Year to date, receipts are still below consensus expectations by $2.3 million, or -2.2%. October revenues were upbeat in the T-Fund’s two fuel tax sources - gas tax and diesel tax – with receipts coming in above target, balanced out by a slight miss in the monthly purchase and use tax, which is tied to vehicle sales.
The latest data shows vehicle sales and leasing activity may be starting to soften, just as vehicle inventories have begun to recover—mostly tied to high vehicle prices and increased financing costs for leases and credit-based sales.
Education Fund revenues last month were $1.1 million, or 1.7%, above the monthly consensus cash flow target, having collected $66.0 million in October.
For the first four months of the fiscal year, the Education Fund comfortably outperformed the consensus estimate by $7.7 million, or 3.2%. Last month’s outperformance was primarily the result of positive October revenue receipts in two of the three consumption tax sources in this fund aggregate.
First, was the above monthly consensus target performance by the sales and use tax.
The other was the good performance by the Education Fund’s portion of October meals and rooms tax receipts.
Revenue data for the first four months of the state’s fiscal year continue to show positive results in the aggregate.
According to Secretary Clouser: “This performance appears to offer at least some assurance that the strong first quarter receipts activity was not a fluke, and the underlying receipts momentum is holding up. This occurs even as some revenue generating economic activities in sectors such as housing, financial services and technology have recently begun to soften under the pressure of interest rate increases.”
State News
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