by Timothy McQuiston Vermont Business Magazine All three of the major tax funds improved last month. While only the General Fund is now ahead of its year-to-date target, the Transportation and Education made up for losses in recent months by getting back nearly to economists' expectations. Importantly, the vital Personal Income Tax, the single largest line item, showed strength after languishing during the summer and is nearly on target for the fiscal year. The Education and Transportation funds were helped by an increase in the Motor Vehicle sales and use tax (up 21.67 percent), which, like the PI, had underperformed since the start of the fiscal year July 1. September is the third month of FY 2016 and the end of the 1st Quarter. The fiscal year revenue targets were adopted by the Vermont Emergency Board on July 27, 2015.
Overall, driven largely by the Corporate tax, General Fund (GF) revenues totaled $146.08 million for September versus the monthly target of $138.72 million, +$7.36 million or +5.31% ahead. Personal Income Taxes of $76.62 million exceeded target by +$2.40 million or 3.23%. Corporate Income Taxes exceed the monthly target by +$6.78 million, or +35.98%. The favorable September results have pushed the cumulatively year-to-date General Fund receipts of $340.26 million above the Y-T-D target by +$4.91 million, or +1.46%. 1st Quarter GF revenue receipts for FY 2016 now exceed the prior year (FY 2015) results by +$13.21, or +4.04%.
Administration Secretary Justin Johnson said, “In addition to providing a small cushion, the strong performance by the G-Fund in September also helped us rebuild the revenue shortfall from August. It is very encouraging to see receipts exceeding not only the prior year, but the current cumulative target as well.”
The Transportation Fund (TF) dedicated receipts for September, of $26.30 million, exceeded the monthly target by +$2.21 million, or +9.16%, resulting in year to date results of $67.12 million, just slightly below the cumulative target by -$0.22 million, or -0.32%. As predicted, unprocessed TF receipts have caught up resulting in the above target receipts. Compared to the prior fiscal year (FY 2015) cumulative results, the TF is +$0.97 million, or +1.46% ahead of the prior 1st Quarter. The Administration anticipates a small amount of catch up processing to impact October. However, lower gasoline prices, and therefore lower gasoline taxes, are expected to increase. National rating firms anticipate that gasoline prices are expected to continue to decline as the winter grades of cheaper fuel are introduced later this fall.
The Education Fund (EF) receipts were +$0.80 million, or 5.06% ahead of the monthly target of $15.86 million, driven largely by the EF portion of the MV Purchase and Use catch-up revenue. The EF cumulative results through September are -$0.78, or -1.66% below of Y-T-D target but, +$1.55 million, or +3.45% ahead of the prior fiscal year (FY 2015).
Johnson said, "These results are an encouraging end to the first quarter of the fiscal year, the continued year-over-year growth shows that our economy continues to recover."
