Tax revenues down as Corporate Tax slumps

Vermont Business Magazine – The Personal Income tax was down a little and the Corporate Tax was down a lot as General Fund revenues collected for the month of September totaled $149.99 million, -$3.34 million below the consensus cash flow expectation adopted by the Emergency Board on July 21, 2017, according to Secretary of Administration Susanne Young. The under-performance was driven primarily by -$2.87 million less than expected collections in Personal Income Tax and -$1.92 million less than expected in Corporate Tax. All other components of the General Fund were either slightly ahead or behind target, with the Rooms & Meals Tax (+3.26%) had another good month.

Year to date, which is also the first quarter of fiscal year 2018, the General Fund under-performed by -$2.85 million, again driven primarily by less than expected collections in Personal Income and Corporate Taxes. The Corporate Tax in particular has suffered this fiscal year, as it’s down year-over-year by -17.62%.

The Transportation Fund collected $26.62 million for the month, $1.26 million ahead of its $25.36 million target. All components of the Transportation Fund were modestly ahead of target led by the Purchase and Use Tax at +$0.88 million. Year to date, the Transportation Fund is ahead of target by +$1.27 million.

The Education Fund collected $17.67 million for the month, +$0.87 million above the target of $16.79 million. Year to date the Education Fund is ahead of target by $0.51 million.

Compared to September in fiscal year 2017, the General Fund revenues to date have increased by only $.58 million, $352.98 million vs $349.55 million. The Transportation and Education Funds revenues are also only slightly ahead by $2.67 million and $2.68 million respectively.

Secretary Young stated, “We are pleased to see some year over year revenue growth but continue to be concerned the economy is growing at a rate lower than expected. The first quarter typically represents the first major milestone of any fiscal year and, while the under-performance was less than 1%, it is nevertheless a concern that we missed on the negative side of the forecast.”

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