by Timothy McQuiston, Vermont Business Magazine Vermont tax revenues made up some lost ground last month as the General Fund, Transportation Fund and Education Fund all surpassed their respective consensus targets for August. The Personal Income Tax came back after several lackluster months. The PI is the state’s most important General Fund revenue source. However, the Corporate Income Tax, which had been covering for the PI during that time, fell under projections.
The State’s General Fund, Transportation Fund, and Education Fund receipts were a combined $239.2 million, exceeding the $220.0 million monthly consensus target by $19.2 million, or 8.7%.
The Transportation Fund benefitted from a surge in vehicle sales. The Education Fund benefitted from a strong month in Sales & Use tax receipts. In addition, Lottery sales were ahead of projections by almost 50%.
Secretary of Administration Kristin Clouser released Vermont’s revenue results for August 2023 today. The annual fiscal year 2024 consensus revenue forecast adopted by the Emergency Board at its July 31, 2023 meeting.
However, Clauser cautioned that the July flooding has upended the reporting process (including some forbearance in some cases), which could take a few more months to sort out.
General Fund revenues for August totaled $149.3 million, $14.2 million, or 10.5%, above the $135.1 million monthly consensus cash flow target.
Personal Income Tax receipts surpassed their $66.1 million target by $12.6 million, or 19.1%, to yield $78.8 million. The Insurance Tax exceeded its $8.4 million target by $0.7 million, 8.2%, generating $9.1 million; the Liquor Tax exceeded its $0.4 million by 10.6% yielding $0.5 million; and, the Other receipts category generated $3.8 million, or 35.4%, in revenues above its $10.8 million monthly consensus cash flow target producing $14.7 million of receipts.
The Cannabis Excise Tax has brought in $2.6 million so far in FY 2024.
Health Care Taxes failed to achieve their $23.8 million monthly consensus cash flow target, missing by -$0.6 million, -2.4%, and resulting in $23.2 million in monthly collections. The Meals & Rooms Tax missed its $16.3 million monthly consensus cash flow target by -$1.0 million, or -6.0%, yielding $15.3 million.
Monthly receipts in the Corporate Income Tax missed its $5.4 million monthly consensus cash flow target by -$0.1 million, or -1.6%, resulting in monthly revenues $5.3 million. There were $0.7 million in Net Property Transfer Tax receipts last month which was -$1.4 million below census expectations, or -67.4%, below its $2.0 million target.
However, Net Property Transfer Tax receipts were distorted over the first two months of fiscal year 2024 by processing irregularities due to the July 2023 event which delayed the normal July transfer of the first $2.5 million in gross Property Transfer receipts until August. This artificially boosted July Property Transfer receipts in the General Fund at the expense of August Property Transfer Tax revenues posted to the General Fund. Monthly Estate Tax receipts were essentially on target at $1.8 million for the month.
Revenues in the Transportation Fund exceeded their $26.1 million August consensus target by $1.1 million, or 4.0%, to yield $27.2 million. The Gasoline Tax and Other Fees category were essentially on target for the month at $6.4 million and $1.7 million in monthly receipts, respectively.
The Diesel Tax exceeded its $1.4 million target by $0.2 million, or 11.7%, totaling $1.6 million in monthly receipts. Revenues in the Motor Vehicle Purchase & Use Tax were $10.0 million, which were $1.4 million, or 16.5%, above its $8.6 million target. Only the Motor Vehicle Fees category failed to achieve its $8.0 million monthly consensus cash flow target missing by -$0.6 million, or -6.9%, to yield $7.5 million.
Monthly Education Fund revenues of $62.7 million were $3.9 million, 6.7%, above their August $58.8 million cash flow target. The Sales & Use Tax produced $48.0 million, exceeding its $46.1 million monthly consensus cash flow target by $1.9 million or 4.1%. The Motor Vehicle Purchase & Use Tax exceeded its $4.3 million target by $0.7 million, or by 16.5%, resulting in $5.0 million in receipts last month.
Revenues in the Lottery Transfer exceeded its $2.5 million monthly consensus cash flow target by $1.2 million, or 48.6%, to yield $3.7 million of receipts.
Only the Meals & Rooms Tax failed to achieve its $5.9 million monthly consensus cash flow target, missing on the downside by -$0.4 million, or -6.0%, to produce $5.5 million of revenue. Interest earnings for the month were essentially on target” at $0.5 million for the month of August.
According to Secretary Clouser: “August’s positive results demonstrate the forecasting difficulty caused by the July flood event. The gains made this past month were mostly due to administrative processing procedures returning to baseline operations and offsetting July’s misses. Furthermore, the impacts of the July forbearance measures will undoubtedly add an element of uncertainty over the remainder of the calendar year which the Administration will continue to monitor very closely.”
Source: 9.29.2023. Montpelier, VT – Secretary of Administration
