Montpelier, VT - Secretary of Administration Michael K. Smith Announces that General
Fund and Transportation Fund Revenues Were Below Target and Education Fund Revenues
Were Slightly Above Target for March. All Funds May Fall Short of Existing Fiscal
Year 2008 Revenue Targets.
General Fund
Today, Secretary
of Administration Michael K. Smith released the General Fund revenue results
for the month of March, the ninth month of fiscal year 2008. General Fund
revenues totaled $68.72 million, -$7.74 million or -10.12% less than the $76.46
million consensus revenue target for the month. The resulting fiscal
year-to-date General Fund revenue total of $835.91 million is -$1.09 million or
-0.13% below the recently revised consensus forecast of $837.00 million. "The
General Fund results for the month were adversely affected by certain tax
receipts that were received in February but included in the March target. However,
it should be noted that excluding the timing item, General Fund revenue for
March was still below target."Vermont is beginning to feel the impact of the national
economic condition. We are in for a rough period," said Smith, "hopefully,
short in duration, but nonetheless Vermont will be impacted by the national economy."
The monthly
consensus cash flow targets reflect the most recent fiscal year 2008 Consensus
Revenue Forecast that was agreed to by the Emergency Board on January 16,
2008. Normally, the
States Consensus Revenue Forecast is updated two times per year, in January
and July. However, this year, due to concerns about the national economy, the
Emergency Board will be meeting on April 15, 2008 to consider revising the consensus revenue
forecast.
Monthly
Personal Income Tax receipts are the largest single state revenue source, and are
reported Net-of-Personal Income Tax refunds. Personal Income Tax for March ($17.49
million) was above target by +$3.63 million, with the fiscal year-to-date
Personal Income Tax results showing above target performance of +$4.86 million or
+1.25%, and +$35.35 million or +9.89% ahead of the prior year-to-date. "While
Net Personal Income Tax remains above target, we are watching a trend of above
target refunds that, if it continues, could reduce the favorable results in Net
Personal Income Tax. Although Corporate Income Tax was +$0.15 million ahead of
target for the month ($13.01 million vs. $12.86 million) and +$2.29 million
above target year-to-date ($51.02 million vs. $48.73 million), we are concerned
for future results; we are beginning to see some erosion in corporate profits,"
said Smith.
"The
consumption taxes are softening and are of concern," Smith noted. The Rooms
& Meals Tax of $12.83 million fell below target again this month (by -$1.50
million or -11.73%). Sales and Use Tax was essentially on target for the month
($16.63 million vs. $16.62 million) and remains only slightly above target
year-to-date at $174.91 million (+$0.37 million or +0.21%).
Smith noted that, "The Other General Fund
categories are also of concern, with below target results for both the month
(-$10.01 million or -49.38%) and year-to-date (-$6.76 million or -5.27%)." The
Other General Fund category includes Insurance Tax, Estate Tax, Bank Franchise
Tax, Telephone Tax, Liquor Tax, Property Transfer Tax, Fees, and Other Taxes. "The
Insurance Tax fell below target again by -$9.10 million or -83.99%, only some
of which was due to prior month timing. Estate Tax also fell below target by -$1.9
million or -88.29% for the month," said Smith. Year-to-date, through March, the
Estate Tax, which is always difficult to predict, was -$4.98 million or -34.69%
below the year-to-date target.
General Fund By Major
Element (In Millions)
YTD
YTD
%
March
March
%
Tax Component
FY 2007
FY 2008
Change
2007
2008
Change
Personal Income
357.53
392.88
9.89%
15.56
17.49
12.40%
Sales & Use
169.91
174.91
2.94%
16.17
16.63
2.84%
Corporate
49.19
51.02
3.72%
19.57
13.02
-33.47%
Meals & Room
89.67
95.57
6.58%
10.76
11.33
5.30%
Insurance Premium
47.66
47.67
0.02%
7.07
1.73
-75.53%
Inheritance &
Estate
17.14
9.38
-45.27%
3.90
0.26
-93.33%
Real Property Transfer
9.68
8.65
-10.64%
0.84
0.75
-10.71%
Other
57.17
55.83