September major fund revenue totals
State tax revenues stayed relatively steady through September, according to the latest monthly revenue report from Vermont’s Agency of Administration.
The numbers, collected before the federal government partially closed Oct. 1, don’t reflect the economic impact of the shutdown and looming default narrowly averted Wednesday. With those crises in temporary detente until the next negotiation deadlines in January and February, state budget managers can operate with a bit more certainty — for now.
At the close of Fiscal Year 2014’s first quarter, Vermont’s major funds are just a whisker above their targets: $420,000 to spare in the General Fund, $1.6 million in transportation, $10,000 in education.
“Compared to last year we are 4.6 percent ahead for the first quarter and that is pretty good,” Secretary of Administration Jeb Spaulding said.
Sue Zeller, deputy commissioner of the Department of Finance and Management, sees consumer confidence warily climbing back up, particularly in property sales.
“I don’t know if we’ll ever get back to where it used to be,” she said, referring to the robust and risky markets leading up to the economic recession of 2008. “I think everybody still is a little too raw about what happened. And maybe that’s not a bad thing, that everybody is a little more cautious.”
General Fund
Personal income taxes, which make up more than half the General Fund, tracked just above target for September.
Corporate income taxes appear to be a little up, but that category includes some revenue sources that get recategorized, so the number by itself does not necessarily tell the whole story.
The sales & use and rooms & meals taxes tell another, more nuanced story.
“We tend to think of those consumption taxes as linked,” Zeller said. “And they are linked. But not one to one.”
Case in point: September, when sales and use taxes were a bit light, but meals and rooms were up just a tad.
Just because Vermonters may be going out to dinner more, that doesn’t mean they’re ready to purchase a 50-inch flat-screen TV, Zeller said. And out-of-staters may be keeping their vacation reservations, but not buying as many trinkets to remember their visits by.
The real estate property transfer tax, while it’s only up about 6 percent from its target of nearly $1 million for the month, is nonetheless encouraging.
“The market is coming back — both in volume and in price,” Zeller said. “People are putting their houses on the market, they’re turning, and they’re selling for more.”
Transportation Fund
Spaulding commented in the press release that “It is heartening to see the Transportation Fund ahead of target for the quarter and prior year. That has not been the norm lately.”
The difference in the current fiscal year is the new gasoline and diesel tax structures. The two revenue sources are up more than 36 and 10 percent, respectively. The policy change was made to compensate for gas revenue being down due with lower sales, due to people driving fewer miles in more fuel efficient cars.
“We can’t congratulate ourselves too much on the increase over the prior year, because in fact we increased fuel prices,” Zeller said. “It would appear that what we did with gas prices is working and is compensating for the lower amount of gas (tax) last year.”
Education Fund
Conclusion
Spaulding wrapped up the report with cautious optimism.
“We have seen both the national and Vermont economies continue growing modestly,” he said.
But in evaluating Vermont’s own fiscal performance, Spaulding turned his attention to the recent political performances in Washington, D.C.
“We continue to watch the situation and evaluate the State’s ability to continue operations and critical programs in the face of continued closure and debt uncertainty,” he said.
Spaulding’s report was issued before the federal agreement was reached Wednesday. But given its temporary nature, contingency planning might not be over.
