Secretary of Administration Jeb Spaulding has released the July 2011 General Fund (GF) Revenue results. July is the first month of fiscal year 2012. General Fund revenues totaled $86.27 million for July 2011, and were -$4.89 million or -5.36 percent below the $91.16 million consensus revenue forecast for the month.
Spaulding explained, ‘While we always prefer to meet or exceed our targets, I would caution anyone from using this one month’s performance as a barometer for the future. July is a notoriously bad predictor of how revenue will trend for the fiscal year in total. For example, July 2010 GF revenue was short of the monthly target by -1.6 percent, but the full year ended up12.9 percent above target.’
‘One positive sign I would like to note is that although July 2011 General Fund revenues were below the monthly target, we were still ahead of last July by 4.9 percent - a continued sign of a slow, but steady recovery. The big question at this point is how the events playing out in Washington DC and global financial markets will affect that recovery,’ Spaulding commented.
Current targets reflect the Fiscal Year 2012 Consensus Revenue Forecast adopted by the Emergency Board at their July 21, 2011 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.
Personal Income Tax (PI) receipts are the largest single state revenue source providing approximately 50 percent 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 $44.52 million, -$3.59 million or -7.46 percent short of the monthly target of $48.11 million.
Corporate Income Taxes are also reported net-of refunds. July Corporate receipts of $1.97 million were -$0.41 million or -17.03 percent below the monthly target of $2.38 million. Since most Corporate Taxes are paid on a quarterly basis, the four largest months for Net Corporate Tax Receipts are September, December, March and June.
Consumption tax results for July were ahead of target: Sales & Use Tax receipts of $21.32 million exceeded the monthly target by +$0.58 million (+2.78 percent) and were 7.2 percent ahead of what was collected for the month last year; Rooms & Meals Tax receipts of $10.37 million exceeded target by +$0.31 million (+3.06 percent) and were 3 percent ahead of what was collected for the month last year.
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, $0.41 million (+54.65 percent); Inheritance & Estate Tax, $0.38 (-76.65 percent); Property Transfer Tax, $0.78 million (-8.16 percent); and ‘Other’, $6.51 million (-8.31 percent).
Transportation Fund
The non-dedicated Transportation Fund Revenue for July was also reported on by Secretary Spaulding. Total non-dedicated Transportation Fund receipts of $15.26 million for the month fell below target by -$0.46 million (-2.92 percent), against the monthly target of $15.72 million.
Individual Transportation Fund revenue receipts components for July were mixed: Gasoline Tax, $5.11 million or +0.73 percent ahead of target; Diesel Tax, $0.50 million or -36.15 percent below target; Motor Vehicle Purchase & Use Tax, $3.28 million or -8.51 percent behind target; Motor Vehicle Fees, $5.05 million or -0.95 percent below target; and Other Fees, $1.31 million or +12.28 percent above the monthly target.
Secretary Spaulding said, ‘Once again, July is not a good predictor of the overall Transportation Fund revenue trend. The specter of high fuel prices remains a concern for the T-Fund and our economic recovery, but if oil prices continue to abate somewhat from their recent highs and the economy stabilizes, revenues for the year may perform as or better than expected. Higher energy prices, particularly for gasoline can have a deleterious effect on the economy and the recovery.’
The Secretary also reported on the results for the Transportation Infrastructure Bond Fund (’TIB’). TIB Fund Gas receipts for July were $1.60 million or +4.99 percent in excess of target. TIB Fund Diesel receipts were $0.06 million or -29.20 percent short of the monthly target. TIB Fund receipts are noted below the following table:
Education Fund
The ‘non-Property Tax’ Education Fund revenues (which constitute approximately 12 percent of the total Education Fund sources) were released today by Secretary Spaulding. The non-Property Tax Education Fund receipts for July totaled $13.30 million, or +$0.14 million (+1.03 percent) above the $13.16 million target for the month. The individual Education Fund revenue component results for July were: Sales & Use Tax, $10.66 million, or +2.78 percent above target; Motor Vehicle Purchase & Use Tax, $1.64 million or -8.51 percent; Lottery Transfer, $1.00 million - exactly on target; and Education Fund Interest, a loss under $0.01 million against a target of under $0.01 million.
Conclusion
Secretary Spaulding concluded, ‘Vermont’s economy has slowly been recovering and July revenues do not contradict that trend. However, clearly, we are concerned about potential impacts from current global and national events. We will be keeping an especially close eye on our revenue performance and budgetary moves in Washington over the next month or so, in case quick action is needed by the Governor and Legislature.’