Vermont tax revenues exceed targets for August

The vital personal income tax was down, but consumption taxes like the sales and rooms & meals taxes were up, helping to lead an overall slightly positive report for the Vermont August tax report in all three phases. Secretary of Administration Jeb Spaulding released the August 2012 General Fund (GF) Revenue results today. General Fund revenues totaled $88.86 million for August 2012, and were +$1.03 million or +1.17% above the $87.83 million consensus revenue forecast for the month, more than covering the prior month’s shortfall. Year to date, General Fund revenues were $181.19 million, and +$0.23 million or +0.13% above the two month target of $180.96 million. August is the second month of fiscal year (FY) 2013. 

Secretary Spaulding commented, “August General Fund receipts allowed us to recoup a July shortfall and placed us slightly ahead of our year-to-date target. In addition, the year-to-date August 2012 General Fund revenues exceeded 2011 receipts for the same period by +2.80%. While this is indeed good news, it is too early to tell what it means for Fiscal Year 2013. Revenue components as a whole are performing well, but remain volatile individually.”

Current targets reflect the Fiscal Year 2013 Consensus Revenue Forecast adopted by the Emergency Board at their July 20, 2012 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% 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 August were recorded at $37.76 million, -$4.63 million or -10.91% below the monthly target of $42.38 million. Year to date, net PI Receipts were $86.70 million, -$3.81 million or -4.21% behind target.

Corporate Income Taxes are also reported net-of refunds. August Corporate refunds exceeded receipts, representing a return of -$0.61 million, -$2.31 million or -135.79% behind of the monthly target of $1.70 million. Year to date Corporate receipts were $1.01 million, -$3.31 million or -76.57% below target. Compared to the same period for the prior fiscal year (FY 2012), Corporate Income Tax receipts were -77.48% below the prior year.

Consumption tax results for August were higher than targeted: Sales & Use Tax receipts of $19.44 million were ahead of target by +$1.51 million (+8.44%); Rooms & Meals Tax receipts of $13.28 million exceeded target by +$0.48 million (+3.77%). Year to date, both Sales & Use Tax ($40.43 million or +1.54%) and Rooms & Meals Tax ($24.47 million or +3.05%) were above target for August, as well as being above the two month total receipts for the prior year by +4.58% and +7.34% respectively.

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 August were as follows: Insurance Tax, $6.82 million (-2.08%); Inheritance & Estate Tax, $6.30 (+321.94%); Property Transfer Tax, $0.87 million (+5.12%); and “Other”, $5.01 million (+33.81%). The year to date August results for the remaining non-major categories were: Insurance Tax, $7.24 million (-1.85%); Inheritance & Estate Tax, $7.27 (+140.21%); Property Transfer Tax, $1.80 million (+8.40%); and “Other”, $12.27 million (+16.89%). Cumulatively, the total non-major component receipts of $26.79 million fell short of the prior year total by -$5.71 million, or -25.0%.

Transportation Fund

The non-dedicated Transportation Fund Revenue for August was also reported on by Secretary Spaulding. Total non-dedicated Transportation Fund receipts of $21.43 million for the month exceeded target by +$0.30 million (+1.42%), against the monthly target of $21.13 million. The excess August receipts covered most of the July shortfall, leaving August year to date Transportation Fund receipts of $37.36 million short of the $37.52 million target by -$0.16 million or -0.42%. Compared to FY 2011, year to date August Transportation Funds receipts now exceed the prior year by +$2.09 million or +5.93% for the same period.

Individual Transportation Fund revenue receipts components for August were mixed: Gasoline Tax, $5.47 million or -0.69% behind target; Diesel Tax, $1.85million or +6.52% above target;

Motor Vehicle Purchase & Use Tax, $5.23 million or -0.24% behind target; Motor Vehicle Fees, $7.27 million or +4.98% ahead of target; and Other Fees, $1.61 million or -6.22% short of the monthly target. Year to date results for the individual Transportation Fund revenue components for August were: Gasoline Tax, $10.50 million or -0.66% below target; Diesel Tax, $2.21 million or -5.81% behind target; Motor Vehicle Purchase & Use Tax, $8.69 million or -0.90% short of target; Motor Vehicle Fees, $12.92 million or +0.89% ahead of target; and Other Fees, $3.04 million or +0.47% above the monthly target.

Secretary Spaulding said, “The Transportation Fund revenue seems to be holding its own and is, in fact, slightly ahead of the receipts at this point last year, although two months is not sufficient to project a yearly trend.”

The Secretary also reported on the results for the Transportation Infrastructure Bond Fund (“TIB”). TIB Fund Gas receipts for August were $1.93 million or -0.49% behind target; year to date TIB Gas receipts were $3.72 million, essentially on target. TIB Fund Diesel receipts for the month were $0.11 million or -49.71% short of the monthly target; year to date TIB Diesel receipts were $0.15 million or -48.94% short of target. TIB Fund receipts are noted below the following table:

Education Fund

Secretary Spaulding also released the “non-Property Tax” Education Fund revenues (which constitute approximately 13% of the total Education Fund sources) today. The non-Property Tax Education Fund receipts for August totaled $14.08 million, or +$0.73 million (+5.45%) above the $13.35 million target for the month. Year to date, non-Property Tax Education Fund receipts were $27.30 million, or +0.90% ahead of the year to date target. The individual Education Fund revenue component results for August were: Sales & Use Tax, $9.72 million, or +8.46 % above target; Motor Vehicle Purchase & Use Tax, $2.62 million or -0.25%; Lottery Transfer, $1.73 million or -2.14% below target; Education Fund Interest for August was less than -$0.01 million. Year to date receipts by component were: Sales & Use Tax, $20.21 million, or +1.54% above target; Motor Vehicle Purchase & Use Tax, $4.35 million or -0.90%; Lottery Transfer, $2.73 million or -1.37% below target; year to date Education Fund Interest was less than -$0.01 million. As compared to prior year, FY 2012 year to date non-Property Tax Education Fund receipts are 3.94% ahead of the FY 2011 results for the same period.

Conclusion

Secretary Spaulding concluded, “It is nice to be on target and ahead of last year's revenue collections, but two months into the fiscal year, especially with significant volatility in specific revenue components, is too soon to speculate about what the rest of the fiscal year will look like. I look forward to the September results.”