Vermont Secretary of Administration Neale Lunderville announced today that Vermont’s September tax revenue figures were above targets for the General Fund and Education Fund, but were slightly below target for the Transportation Fund.
General FundSeptember is the third month of fiscal year (FY) 2011. General Fund revenues totaled $117.72 million for September 2010, and were +$8.75 million or +8.03% above the $108.97 million consensus revenue forecast for the month. Year-to-date General Fund performance of $281.65 million was +$12.44 million, or +4.62% ahead of year to date target of $269.21 million. This +$12.44 million overage is almost fully attributable to a one-time bank franchise receipt in August and likely one-time corporate income tax receipts this month as discussed below.
The current forecast does not project a return to fiscal year 2008 revenue levels until fiscal year 2013.
The monthly targets reflect the revised Fiscal Year 2011 Consensus Revenue Forecast approved by the Emergency Board at their July 14, 2010 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. The next Emergency Board meeting will be scheduled for January 2011.
Personal Income Tax (PI) receipts are the largest single state revenue source, and are reported Net-of-Personal Income Tax refunds. Personal Income Tax receipts for September were recorded at $55.76 million, or -$0.30 million or -0.54% below the monthly target of $56.06 million.
Corporate Income Taxes for September, which are also reported net-of refunds, were recorded at $22.26 million against a target of $11.95 million, or +$10.31 million (+86.30%) above target.
Lunderville noted that, “Approximately $7.2 million of the favorable monthly results in the Corporate Income Tax was associated with a very small number of corporate estimated payments. We are concerned that these estimated payments may be overstated and that some portion will be refunded when corporate income tax returns are filed. Our economists view this above target result as a one-time event and not indicative of an economy improving more quickly than expected.”
The consumption taxes experienced mixed results for September; Sales & Use Tax receipts of $17.51 million exceeded the monthly target by +$0.52 million (+3.05%), while Rooms & Meals Tax receipts of $12.60 million fell below target by -$0.09 million (-0.69%).
The year to date results for the four major General Fund categories are as follows: Personal Income Tax, $133.67 million (-0.03%); Sales & Use Tax, $53.55 million (+0.80%); Corporate, $23.01 million (+60.11%); and Meals & Rooms Tax, $34.08 million (+0.01%).
The remaining 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 month of September were as follows: Insurance Tax, $0.49 million (-60.28%); Estate Tax, $0.55 million (-63.52%); Property Transfer Tax, $0.68 million (-19.38%); and “Other”, $7.88 million (+2.27%). Year to date results for these categories were: Insurance Tax, $8.28 million (+1.70%); Estate Tax, $2.67 million (-32.46%); Property Transfer Tax, $2.05 million (-15.95%); and “Other”, $24.33 million (+25.53%). The majority of the favorable year to date results in the “Other” category were due to unanticipated settlement activity for the prior month in Bank Franchise Taxes.
Transportation FundSecretary Lunderville also reported on the results for the non-dedicated Transportation Fund Revenue for September. Total non-dedicated Transportation Fund receipts of $19.32 million for the month were slightly below target by -$0.02 million (-0.08%), against the monthly target of $19.34 million. The year to date non-dedicated Transportation revenue was $54.50 million versus the target of $54.48 million (+$0.02 million, +0.04%).
Individual Transportation Fund revenue receipts components for September were: Gasoline Tax, $5.25 million or -11.03% behind target; Diesel Tax, $1.43 million or +3.47% ahead of target; Motor Vehicle Purchase & Use Tax, $5.03 million or +4.97% above target; Motor Vehicle Fees, $6.02 million or +6.36% above target; and Other Fees, $1.61 million or -0.73% short of the monthly target. The September year to date Transportation Fund revenue results were: Gasoline Tax, $16.10 million or -3.89% short of target, Diesel Tax, $3.56 million or +2.98% ahead of target; Motor Vehicle Purchase & Use Tax, $12.42 million or -3.31% below target; Motor Vehicle Fees, $18.06 million or +6.69% above target; and Other Fees, $4.35 million or -3.02% short of target.
Secretary Lunderville also reported on the results for the Transportation Infrastructure Bond Fund (“TIB”). TIB Fund Gas receipts for September were $1.41 million or -10.86% short of target; year to date receipts of $4.19 million were -6.61% below target. TIB Fund Diesel receipts were $0.17 million or +5.04% above target for the month; year to date TIB Diesel receipts were $0.50 million or +19.53% ahead of target. TIB Fund receipts are noted below the following table:
Education FundThe preliminary “non-Property Tax” Education Fund revenues (which constitute approximately 11.9% of the total Education Fund sources) were released today by Secretary Lunderville. The non-Property Tax Education Fund receipts for September totaled $12.94 million, or +$0.24 million (+1.87%) above the $12.71 million target for the month. Year to date Education Fund revenues were $37.29 million or -0.34% behind the year to date target of $37.41 million.
The preliminary individual Education Fund revenue component results for September were: Sales & Use Tax, $8.76 million, or +3.05% ahead of target; Motor Vehicle Purchase & Use Tax, $2.51 million or +4.97%; Lottery Transfer, $1.66 million or -8.89%; and Education Fund Interest, $0.01 million against a target of -$0.01 million (percent not meaningful). Year-to-date results were: Sales & Use Tax, $26.78 or +0.80%; Motor Vehicle Purchase & Use Tax, $6.21 million or -3.31%; Lottery Transfer, $4.28 million or -3.58%; and Education Fund Interest, $0.02 against a target of -$0.01million (percent not meaningful).
Conclusion“There has been a noticeable loss of momentum in the economic recovery,” said Secretary Lunderville. “Consumer and business confidence remains low and continues to be a brake on the recovery.”
“Compared to prior fiscal years, September year to date results for fiscal year 2011 have exceeded fiscal year 2010, but remain 4.2% below fiscal year 2009 and 2.5% below fiscal year 2008 for the same three-month period,” continued Lunderville. “The current forecast does not project a return to fiscal year 2008 revenue levels until fiscal year 2013.”
“It’s very important to note that absent two unusual and unexpected revenue events – tax settlement activity in August and estimated corporate taxes in September – general fund revenue would be essentially on target for the first quarter of fiscal year 2011,” Lunderville concluded. “While we are pleased to be ahead of target, this is not an indication of the economy improving quicker than expected.”
Source: Lunderville. 10.15.2010