Vermont Business Magazine Personal income tax revenues, the most important single revenue source for Vermont's General Fund, fell below expectations for July, as it had for the last few months of the fiscal year that ended June 30, 2014. The lagging personal income tax was somewhat offset by a continued strong performance by the corporate tax and the modestly improved sales, rooms and meals taxes. However, the capricious estate tax was well off. The Transportation and Education funds were both ahead of targets.
Secretary of Administration Jeb Spaulding released the preliminary July and fiscal year (FY) 2015 revenue results today for the General, Transportation, and Education Funds. July is the first month of FY 2015. These results reflect the new consensus revenue targets as adopted by the Emergency Board last month.
Governor Shumlin is taking a measured approach to the necessary budget cuts resulting from the new revenue numbers. While the entire General Fund budget needs to be cut 1.8 percent, he has asked all department heads to reduce their budgets 4 percent, with the understanding that, at the end of the day, some departments will by cut more and some less. The governor insists that education will not be cut, nor property taxes raised to meet the $31 million shortfall.
SEE VIDEO BELOW OF GOVERNOR'S COMMENTS ON THE "DO-ABLE CHALLENGE"
RELATED:Shumlin proposes cutting current state spending nearly 2 percent as tax revenue slows
“From an economic perspective, I am very pleased with our revenue performance in July,” said Secretary Spaulding. “Personal Income Tax collections were up 4.63% over last July, Sales & Use Tax collections were up 7.47 percent, Rooms & Meals Tax receipts were up 4.36 percent, and the Motor Vehicle Purchase & Use Tax was up 18.91 percent. That performance combined with recent positive national GDP and labor market reports is encouraging.”
“Still, from a budgetary perspective, we finished the first month of the new fiscal year shy of target by -$1.82 million or -1.77% in the General Fund, due mostly to higher than projected personal income tax refunding and lower withholding receipts. That reinforces the need to quickly implement a spending reduction plan consistent with the updated FY 2015 official revenue fore-cast and to remain prepared in the event we need further budget adjustments in January,” Spaulding stated.
General Fund revenues totaled $101.00 million for July 2014, -$1.82 million or -1.77% below the monthly and cumulative budget forecast targets. Total GF revenues for the month for were -$2.46 million or –2.38% behind the actual results for the prior fiscal year (FY 2014), primarily as a result of the volatile Estate Tax finishing the month at $8.77 million less than last year.
The Transportation Fund came in higher than projected for the month of July, finishing at $1.05 million, or 5.58%, higher than its monthly and cumulative targets. TF revenues were $1.62 million or 8.87% ahead of the prior fiscal year (FY 2014).
The Education Fund came in higher than budgeted for the month of July, finishing at $0.65 million, or 4.39%, above its monthly and cumulative targets. EF revenues were $1.20 million or 8.43% ahead of the prior fiscal year (FY 2014).
