Vermont tax revenues were below economists' projections for July, but were ahead of actual results from a year ago.Secretary of Administration Jeb Spaulding today released the July 2012 General Fund revenue results. July is the first month of fiscal year 2013. General Fund revenues totaled $92.33 million for July 2012, $5.65 million or $6.52% ahead of July 2011. They were -$0.79 million or -0.85% below the $93.13 million consensus revenue forecast for the month and year to date.
Spaulding said in a statement: ‘The fact that General Fund revenues for this July were six and a half percent over last July has to be seen as good news. While it would have been ideal to have achieved or exceeded the current month’s target as well, given the very small level of underperformance and the knowledge that, while last July was 5.4% under projection, the fiscal year ended with a small surplus, I don’t see any cause for alarm. It is important to keep in mind, that historically, July is not predictive of the fiscal year’s revenue trend. It is not uncommon that years with under target performance in July end up with a surplus by year end.’
Current targets reflect the Fiscal Year 2012 Consensus Revenue Forecast adopted by the Emergency Board at their July 20, 2012 meeting. Statutorily, the State is required to revise the Consensus Revenue Forecast two times per year, in January and July; the Emergency Board may schedule interim revisions if deemed necessary. A date for the January 2013 Emergency Board has not been selected at this time.
Personal Income Tax (PI) receipts are the largest single state revenue source providing approximately 50% of total GF revenue. PI Tax receipts are reported Net-of-Personal Income Tax refunds. Net Personal Income Tax is comprised of PI Withholding Tax, PI Estimated Payments, PI Refunds Paid, and PI Other. Net PI Receipts for July were recorded at $48.95 million, +$0.81 million or +1.69% ahead of the monthly target of $48.13 million.
Corporate Income Taxes are also reported net of refunds. Corporate Refunds for the month were $1.62 million, -$1.00 million short of the monthly target of $2.62 million. Secretary Spaulding commented, ‘We will wait to see future Corporate Income Tax results in the coming months before additional results before becoming concerned about one volatile month.’
Consumption tax results for July were mixed: Sales & Use Tax receipts of $20.98 million were short of target by -$0.90 million (-4.12%); and Rooms & Meals Tax receipts of $11.19 million were above target by +$0.24 million (+2.20%). Compared to the results for the same month of the prior fiscal year (FY 2012), July Sales & Use Tax fell below prior year by -2.34%, and Meals & Rooms exceeded the prior year results by +6.88%.
The remaining non-major tax components include Insurance, Inheritance & Estate Tax, Real Property Transfer Tax, and ‘Other’(which includes: Bank Franchise Tax, Telephone Tax, Liquor Tax, Beverage Tax, Fees, and Other Taxes). The results for the remaining non-major categories for July were as follows: Insurance Tax, $0.42 million (+2.01%); Inheritance & Estate Tax, $0.97 (-36.55%); Property Transfer Tax, $0.93 million (+11.65%); and ‘Other’, $7.27 million (+7.54%). July non-major components total of $77.18 million through July 2012, is +$1.24 million or +1.63% ahead of receipts for the same period of FY 2012.
Transportation Fund
Secretary Spaulding also released the non-dedicated Transportation Fund Revenue for July. Total non-dedicated Transportation Fund receipts of $15.93 million for the month fell short of target by -$0.46 million (-2.79%), against the monthly target of $16.39 million. July 2012 non-dedicated Transportation Funds have exceeded the prior year (FY 2012) by 6.04% for the same period.
Four of five non-dedicated Transportation Fund revenue components fell short of target for July; the lone exception being the ‘Other’component. Individual Transportation Fund revenue components for July were: Gasoline Tax, $5.03 million or -0.63% behind target; Diesel Tax, $0.36 million or -40.93% below target; Motor Vehicle Purchase & Use Tax, $3.46 million or -1.88% behind target; Motor Vehicle Fees, $5.65 million or -3.92% below; and Other Fees, $1.43 million or +9.24% above the monthly target.
The Secretary also reported on the results for the Transportation Infrastructure Bond Fund (’TIB’). TIB Fund Gas receipts for July were $1.80 million or +0.73% in excess of target. TIB Fund Diesel receipts for the month were $0.04 million or -46.86% below the monthly target. Net total TIB receipts for July of $1.84 million exceed the results for the same period in the prior fiscal year (FY 2012) by +5.79%. TIB Fund receipts are noted below the following table:
Transportation Fund By Major Element (In Millions)*
MonthFiscal YTD$
%
$
%
Tax Component
Target
Revenue
Change
Change
Target
Revenue
Change
Change
Gasoline
5.07
5.03
-0.03
-0.63%
5.07
5.03
-0.03
-0.63%
Diesel Fuel
0.61
0.36
-0.25
-40.93%
0.61
0.36
-0.25
-40.91%
MV Purchase & Use
3.53
3.46
-0.07
-1.88%
3.53
3.46
-0.07
-1.88%
Motor Vehicle Fees
5.88
5.65
-0.23
-3.92%
5.88
5.65
-0.23
-3.92%
Other
1.31
1.43
0.12
9.24%
1.31
1.43
0.12
9.24%
Total
16.39
15.93
-0.46
-2.79%
16.39
15.93
-0.46
-2.79%
Education Fund
Today, Secretary Spaulding released the ‘non-Property Tax’Education Fund revenues (which constitute approximately 13% of the total Education Fund sources). The non-Property Tax Education Fund receipts for July totaled $13.22 million, or -$0.48 million (-3.54%) below the $13.71 million target for the month. The individual Education Fund revenue component results for July were: Sales & Use Tax, $10.49 million, or -4.13% below target; Motor Vehicle Purchase & Use Tax, $1.73 million or -1.86%; Lottery Transfer of $1.00 million was exactly on target; and Education Fund Interest was $0.00 for both receipts and target. The July 2012 non-property tax Education Fund receipts are -0.58% behind the July 2011 results for the same period.
Conclusion
Secretary Spaulding concluded, ‘July, one of the smaller months for revenue, is often volatile and should not be relied on as an indicator of revenue trend for the remainder of the year. That being said, despite a slowdown in the national economy, July’s healthy increase in year over year revenue seems to suggest our economic recovery is continuing.’