by Timothy McQuiston, Vermont Business Magazine The state’s tax revenues continue to exceed expectations, led by the personal income tax (the most important source) and the corporate tax (which tends to fluctuate. And while the Transportation Fund continues to lag the other funds, especially in fuel receipts, motor vehicle sales were up and the fund overall had a positive month.
Secretary of Administration Kristin Clouser has released Vermont’s revenue results for November 2022. For the second month in a row, 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 State’s General Fund, Transportation Fund, and Education Fund receipts in November were a combined $210.7 million, or 5.8%, above monthly consensus expectations.
For the first five months of the state’s fiscal year, combined revenues across all three funds were 6.5% above combined consensus target.
General Fund revenues collected in November totaled $129.7 million, $8.9 million above the monthly consensus cash flow revenue target.
Year to date, General Fund revenues were $68.5 million, or 9.2%, above consensus. Positive receipts activity over the month was mostly concentrated in the two income tax sources – personal and corporate, which tracked significantly higher than consensus expectations.
Revenues for most consumption taxes have also moved up, but at a lesser rate than the two income tax sources.
Revenues into the Transportation Fund were up modestly versus monthly consensus expectations, bringing in $23.5 million in November, $0.7 million above the consensus cash flow target.
Year to date, receipts are still below consensus expectations by -$1.6 million, or -1.2%.
The T-Fund posted a second consecutive positive month relative to monthly consensus expectations, however. This occurred despite another lagging month for the two fuel taxes.
In contrast, revenues came in better than expected in the T-Fund’s principal consumption tax source – Motor Vehicles Purchase and Use. In addition, receipts in the Motor Vehicles Fees category were above target.
Education Fund revenues last month were $1.9 million, or 3.3%, above the monthly consensus cash flow target, having collected $57.6 million in November.
For the first five months of the fiscal year, the Education Fund comfortably outperformed the consensus estimate by $9.5 million, or 3.2%.
Results last month and year to date are primarily driven by the various consumption taxes that underpin revenues in this fund. These results reflected the continuing resiliency of consumption activity across the economy, even as Federal Reserve policymakers have sharply raised short-term interest rates as they attempt to slow inflation-accelerating increases in household and business consumption.
Revenue data for the first five months of the state’s fiscal year continue to show positive results in the aggregate. According to Secretary Clouser: “The economy and revenues continue to reflect the push and pull of the exceptional federal fiscal stimulus and the Federal Reserve’s historically harsh tightening moves that are designed to tame the recent rise in inflation. This dynamic is inserting an unusually high level of uncertainty into the revenue outlook, but we are pleased that we enter this period from a position of strength.”
12.19.2022. Montpelier, VT - Secretary of Administration
