REVENUE SHORTFALL: Following a big miss in April, monthly revenues for Vermont’s General Fund were 7.22 percent shy of May expectations, according to a report from the Agency of Administration.
By Bruce Parker | Vermont Watchdog
After missing the target by a sizable margin in April, monthly revenue collections for the state of Vermont were down again in May, this time by an even larger percentage.
According to a report released Friday from the Agency of Administration, May revenue to the General Fund totaled $70.31 million, falling $5.47 million, or 7.22 percent, short of the projected $75.79 million target. Revenue in April missed by $4.86 million, or 2.3 percent.
As was the case in April, the miss was due largely to a shortfall in personal income tax revenue. According to the report, personal income tax revenues for May totaled $33.32 million, which was $4.04 million, or 10.81 percent, lower than the expected $37.36 million. In April, revenues missed by a whopping $22.85 million, or 14.79 percent. April revenues are typically the highest in every fiscal year due to the flood of tax returns filed during tax season.
While Friday’s report revealed evidence of an economic slowdown in Vermont, Secretary of Administration Jeb Spaulding found a silver lining in the monthly numbers.
“Despite underperforming income tax components in April and May, estate and consumption taxes outperformed expectations,” Spaulding said in a statement.
The secretary nevertheless commented that continued monthly misses could lead to a downgrade.
“While our year-over-year economic growth remains on an upward trajectory, the state will be fully prepared to respond quickly in the event our economists review our FY 2014 performance versus budgeted targets and recommend a downgrade to projected revenues going forward.”
In commenting on the sagging General Fund revenue, state Rep. Carolyn Branagan, R-Franklin, said “the biggest problem was the income tax.” Branagan saw little reason for celebration in the higher estate tax revenue, saying, “there is no way to estimate this tax in the future.”
Spaulding encouraged analysts to take comfort in year-over-year increases, noting that “personal income tax withholding receipts are 6.7 percent ahead of last year through eleven months of the fiscal year.” He added that he was encouraged to see receipts up in categories such as sales and rooms and meals.
Contact Bruce Parker at email@example.com