Vermont’s monthly revenues were mostly disappointing again in October, according to a report released Friday by Secretary of Administration Jeb Spaulding.
Financial forecasts predicted more than $115 million would flow into the state’s General Fund during the peak leaf-peeping month. So-called consumption taxes — sales and use, meals and rooms — cleared their targets. But personal income tax receipts fell short by more than $7 million, or 11 percent.
Spaulding said the trend, which has continued largely unabated since April, is worrisome.
“It is the main reason the General Fund is almost $12 million below target through four months of the fiscal year,” he said.
The year-over-year revenue trend has picked up: Nearly all General Fund revenue streams are ahead of collections at the same time last year. But state spending is planned according to anticipated revenues from the current budget cycle’s taxes and fees.
A downward revision to the forecast just weeks after the current fiscal year began prompted a $31 million rescission in August. Continued weak performance heightens fears that state economists may again downgrade their revenue forecast in January, which could trigger a second round of rescissions.
“The Shumlin administration continues to analyze thoroughly the contributing factors for the recent underperformance in the personal income tax and is preparing for further adjustments to operate within available revenues,” Spaulding said in the news release.
In an interview Friday, he added that officials are exploring “some interim administrative steps to slow spending in advance of the legislative session.”
The General Fund is particularly sensitive to personal income tax receipts, which comprise more than half of its revenue stream.
The Education Fund also came in shy of target in October, missing by less than $1 million, due largely to disappointing lottery transfers and investment income.
Though the fund fell short in October, the fiscal year-to-date Education Fund total is ahead of its target by almost $500,000.
The Transportation Fund has fared better, despite disappointing transfers from diesel fuel taxes. Higher than expected overall revenues in October put the Transportation Fund more than $800,000 above target, bringing its budget buffer up to almost $1 million.
