Personal income lags behind in October tax revenue report


by Timothy McQuiston, Vermont Business Magazine

Acting Administration Secretary Kristin Clouser today released Vermont revenue results for October 2021. Cumulative General Fund, Education and Transportation revenue was slightly below targets for October 2021, the first month of the second trimester. Income remains above targets for the year to date.

Notably, personal income tax, which has been well above targets for months, fell nearly $ 4 million in October (-4.5%). The PI is the most important source of income for the General State Fund. However, it remains nearly $ 12 million ahead of the targets for the year (+ 3.81%).

Consumption-related tax revenues have been mixed.

The tax on tourism-related rooms and meals was up, while sales and gasoline were down. Motor vehicle sales are on the rise (+ 4.95%) which, like the PI, is generally considered a barometer of economic health.

Overall, the revenue of the general fund, the transportation fund and the state education fund in September was $ 222.6 million, 1.8% below the monthly expectations of the consensus.

Cumulative revenues remain 3% higher than the consensus revenue expectations for the first four (4) months of the fiscal year of the State.

General Fund revenue collected for the month totaled $ 136.4 million, down $ 4.2 million from the consensus monthly revenue target.

However, since the start of the fiscal year, General Fund revenues amounted to $ 578.5 million, exceeding their target of $ 24.4 million or 4.4%. Personal and corporate income taxes took a brief respite in October from the strong pace recorded in the first quarter of the year.

Clouser said in the income statement that while we are still on track to meet or exceed targets for the year, we will ensure that this is not a new trend.

The Transportation Fund was slightly below consensus expectations for the month, bringing in $ 25.2 million.

Year-to-date, the T-Fund has brought in $ 100.2 million, or $ 450,000 or -0.4% below the consensus cash flow target.

T-Fund revenue continues to be supported by revenue associated with motor vehicle purchases, but revenue from gasoline tax and various Other Fees category revenue was lower than consensus expectations for the month. and the year to date. Despite the negative tone in a few T-Fund categories, cumulative revenue remains within the consensus range.

The Education Fund was $ 530,000 or 0.9% above the monthly consensus target, raising $ 61.1 million for the month.

For the first four months of the fiscal year, the Education Fund received $ 229.2 million, $ 2.3 million or 1.0% above the consensus target.

Sales and use taxes remained lower than expected for the month and year, however, taxes on meals and rooms more than closed the gap as tourists returned to Vermont and the hotel industry continues. its recovery.

According to Acting Secretary Clouser, “Overall, the October income results reflect the uneven pace of Vermont’s recovery, but at this point we remain confident that revenues are on track to meet the estimates of. consensus income for the current fiscal year. “

Gov. Scott was asked by VBM during its Nov. 2 press briefing whether he thought revenues could suffer due to the end of additional pandemic-related revenues provided by the federal government. Emergency unemployment compensation in the event of a pandemic (PEUC) the program expired on September 6.

This October revenue report is the first full month without supplement since its first version launched in March 2020.

The governor acknowledged that a change in the positive tax revenue situation could change, as could the tight labor market, but that it would take time to understand the full impact on both without the PEUC.

“I think the wages have gone up,” Scott said. “They have been supported in some ways over the past year by additional revenue from the federal government. This may not be something that will continue over time, unless we are able to put people in those roles and meet the needs of the workforce. So we’ll see. But I think we have seen an increase in income. It’s supply and demand at this point.

In the latest unemployment report, Labor Commissioner Michael Harrington said Vermont had lost 25,000 workers and nearly many jobs in the state were vacant. The PEUC supplement has been blamed by some for preventing potential workers from seeking employment. So far, those who haven’t flocked haven’t flocked to work.

National reports, which suggest some 25 million Americans have not returned to work, suggest that many workers are looking for new career opportunities, instead of returning to their old jobs.

Still, the national labor scene appears to be improving as new jobless claims have declined. This has not yet been the case in Vermont, where jobless claims are on the rise but at a relatively low level. This suggests that many Vermonters are still not ready to return to work.

Statewide VBM reports confirm a continuing tight labor market for nearly every industry. This was the case before the pandemic and has been exacerbated by it. Child care has become a driving force in keeping adults at home, either because of COVID protocols at school or because child care in general is just not available due to constraints. labor or health problems.

Kristin Clouser took over the administrative agency from Susanne Young, who retired earlier this month.

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