Personal income tax beats forecast by more than $117 million in April

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(1) FY21 personal income includes $162 million in deferred payments from FY2020

(2) FY21 Corporate Income Tax includes $19.2 million in deferred payments from FY2020

Vermont Business Magazine Led by personal income tax — the state’s largest source of revenue — Vermont’s revenue results for April 2022 significantly exceeded forecasts.

Income from the General Fund, in particular, and the Education Fund exceeded the target for the month, while income from the Transportation Fund was below the monthly target. Year-to-date, General Fund and Education Fund revenues are well above target, while the Transportation Fund is slightly below target.

However, Administrative Secretary Kristin Clouser, who released the figures on Friday evening, said a repeat should not be expected next fiscal year. The 2023 fiscal year begins July 1.

General Fund, Transportation Fund and Education Fund revenues were combined by $531.4 million, or 35.0%, above the upwardly revised monthly consensus expectation. Year-to-date revenue was 6.7% above revised consensus expectations in the third quarter of the state’s fiscal year.

General Fund revenue collected for the month totaled $448.4 million, or $138.7 million above the consensus monthly treasury revenue target.

Year-to-date, General Fund income was $1,784.6 million, exceeding its target of $158.4 million or 9.7%. The excessively strong performance of cumulative personal income tax revenues and the equally positive cumulative performance through April of corporate income tax revenues explain almost all of the positive performance of the general fund in April and since the beginning of the year.

Economic momentum in calendar year 2021, supported by federal stimulus payments, led to an unprecedented spring season for personal and corporate tax filings, Clouser said.

Revenue from the Transportation Fund was lower than expected, bringing in $24.4 million in April versus the consensus cash flow estimate of $27.0 million. Year-to-date, the T-Fund returned $234.0 million, -$4.0 million or -1.7% below the consensus cash flow target.

T-Fund revenue for the month was below target in all three non-fuel sources.

The motor vehicle expense component was particularly off the mark for the month of April and revenue activity in the Motor Vehicle Purchase and Use Tax category and in the Other category fresh was also weak last month.

While this may be partly explained by typical month-end issues that cause revenue to “spill over” from month to month, the fact remains that taxable activities related to the T-Fund , especially fuel purchases, appear to be lower than they have recently been. been the case for the broader categories of the economy. The T-Fund was the worst performer of the three for many years.

Education Fund revenue was $1.8 million, or 3.2%, above the consensus monthly cash flow target, after raising $58.6 million in April. Year-to-date, the Ed Fund has received $566.7 million, or 1.3% above the consensus cash flow target.

The Ed Fund’s monthly receipts continued to reflect underlying strength in household consumption activity while also benefiting from the strong recovery in the leisure and hospitality sector.

Room and meal tax, which tends to follow tourism, was ahead of 20.9%, while sales tax was 3.7% above expectations.

The top three state funds total $161.6 million before consensus revenue estimates heading into the final two months of the fiscal year.

According to Administrative Secretary Clouser, “Fiscal year 2022 is shaping up to be an extraordinary year for revenue collection, one that will be difficult, if not impossible, to repeat in the year ahead. We are already seeing signs of moderation in federal fiscal and monetary policy which will inevitably have an impact in Vermont. It certainly bears watching as we craft next year’s budget.

Source: Administrative Secretariat 16.05.2022 Montpellier

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