Tax revenues rebound in November

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Tax revenues rebound in November

Thu, 12/07/2017 - 4:32pm -- tim

Vermont Business Magazine Personal income tax revenues, the most important General Revenue source, rebounded in November to push them up over 24 percent for the month (+$10.08 million) and ahead for the year. November marks the fifth month of fiscal year 2018. General Fund revenues collected for the month of November totaled $104.58 million, $8.30 million above the consensus cash flow expectation for the month. The November monthly consensus cash flow target reflects where General Fund receipts overall should be through the month, given the consensus revenue forecast for fiscal year 2018, adopted by the Emergency Board on July 21, 2017, according to Secretary of Administration Susanne Young.

The better than expected performance for November was also driven primarily by greater than expected collections in the Inheritance and Estate Tax of  $2.46 million. These positive variances were offset by an under performance in Corporate Income Tax receipts of -$5.32 million. All other components of the General Fund were either slightly ahead, or only slightly behind, their monthly targets.

Fiscal year to date, the General Fund is $5.24 million ahead of its cumulative target. Of note, Personal Income Tax collections exceeded expectations by $3.66 million, while Corporate Income Tax missed its estimate by –$2.33 million.

The Transportation Fund collected $21.04 million for the month of November, +$0.81 million ahead of its $20.22 million target. All components of the Transportation Fund were modestly above target for the month, except for Motor Vehicle Fees which was down slightly by -$0.16 million. Year to date, the Transportation Fund is ahead of its cumulative target t by +$1.51 million.

The Education Fund collected $15.04 million for the month, -$0.07 million below the consensus target of $15.11 million. Year to date the Education Fund is ahead of its cumulative through November target by $0.86 million.

Personal income revenues had lagged, especially in October, despite employment growth.

“This month’s results push the General Fund back into positive territory due primarily to the better than expected performance in personal income tax collections—a welcome development but one that underscores the volatility in our personal income tax revenues,” stated Secretary Young. “The reasons for this bounce back from the disappointing October collections are not clear, however, and may be attributable to a variety of reasons, ranging from the fact that there was an additional payroll Thursday in November to decisions by some taxpayers to take advantage of the current federal tax structure in the last months of tax year 2017 in anticipation of federal tax reform legislation.”

The consensus revenue forecast for fiscal year 2018 will be reviewed by the state and legislative economists after December revenues are collected. Their recommendation whether to adjust the forecast for the second half of this budget year or stay the course will be presented to the Emergency Board in mid January 2018.

Source: Secretary of Administration 12.7.2017