by Timothy McQuiston, Vermont Business Magazine Interim Secretary of Administration Sarah Clark released Vermont’s tax revenue results today for September 2024. The General Fund and Transportation Fund exceeded their respective monthly consensus cash flow targets, as adopted by the Emergency Board at its July 2024 meeting, while the Education Fund missed its target. Notably, the personal income tax had another strong month, while the meals & rooms tax again missed its targets.
September is the third month of the 2025 fiscal year and the M&R has missed its target in each of them. The M&R is now -4.4% below its FY target in the General Fund (they are still 7.5% above last year’s actual revenues for the same period.) VermontBiz previously reported that tourism officials said the hospitality industry was relatively soft this summer, perhaps as Americans were taking vacations overseas following pent-up demand due to the pandemic.
The Meals & Rooms Tax goes to the General Fund (69%), Education Fund (25%), and Clean Water Fund (6%). It is a general indicator of tourism activity.
The sales tax also lagged and was -6.3% below projections. With the M&R down, the Education Fund was -8.4% below its target.
Overall, the State’s General Fund, Transportation Fund, and Education Fund receipts were a combined $344.8 million, exceeding the $314.7 million monthly consensus target by $30.2 million, or 9.6%.
Total General Fund revenues for September were $262.4 million, although after taking out $6.9 million that is attributed to the childcare payroll tax, which was implemented on July 1 and will be reported separately later in the year, General Fund revenues for September totaled $255.5 million, $35.1 million, or 15.9%, above the $220.5 million monthly consensus cash flow target.
The -$2.7 million combined miss by the Meals and Rooms Tax, Insurance Tax and Estate Tax offset the $37.7 million of combined gains made by all other revenues relative to their respective targets.
Revenues in the Transportation Fund exceeded their $27.5 million September consensus target by $0.7 million, or 2.6%, across all revenue categories yielding $28.2 million in total.
Monthly Education Fund revenues of $61.1 million were -$5.6 million, or -8.4%, below their September $66.7 million cash flow target. The $0.1 million of combined above target performance by the Motor Vehicle Purchase and Use Tax, and Lottery Receipts were offset by -$5.7 million of combined target misses by the Sales and Use Tax, Meals and Rooms Tax and Interest Receipts.
According to Interim Secretary Clark: “Solid receipts in personal and corporate income taxes have bolstered the first quarter of the State’s 2025 fiscal year, although we are beginning to see some weakness in consumption taxes, which accounts for the small underperformance of the Education Fund relative to the consensus forecast. More will be known next month when consumption tax receipts will more accurately reflect the cumulative results of the summer tourism season.”
Source: 10.28.2024. Montpelier, VT – Interim Secretary of Administration