Vermont’s General Fund revenue shortfall for the current fiscal year slipped in November from about $12 million to $18.63 million, Gov. Peter Shumlin’s administration announced Monday. The monthly revenue report again cited lower than expected personal income tax receipts as the weakest link in the state’s budget planning.
Secretary of Administration Jeb Spaulding said in a news release that the revenue picture this fiscal year is hard to interpret. November was the eighth-straight month that personal income receipts have come in below projections.
Personal income taxes make up about half the state’s General Fund, and now comprise almost all of its shortfall.
The state’s economists had predicted approximately $41 million in personal income tax receipts in November, but the state brought in $38 million. The overall revenue gap of $6.72 million is almost 8 percent below the monthly target.
“The fact that Personal Income Tax receipts, the largest source of General Fund revenue, have underperformed every month since April, and are now almost $18 million below projection for the fiscal year, is of significant concern and a big reason why the Shumlin administration is seeking to reduce state spending without delay,” Spaulding said in a news release.
Spaulding, along with Department of Finance and Management Commissioner Jim Reardon, informed the Legislature’s Joint Fiscal Committee in November that they intended to unilaterally execute budget cuts before the newly elected Legislature reconvenes in January.
Lawmakers rebelled, questioning the executive branch’s authority to act unilaterally under the current circumstances. The Shumlin administration later conceded, saying it still believes it has the right, but would rather work with elected officials than argue over the jurisdiction.
He said the urgency remains, but there is some indication that the year-to-date shortfall, five months into fiscal year 2015, may be offset by other growth.
“Improving job and economic growth rates, as well as better than forecasted performance in consumption taxes … support this thinking,” Spaulding said in the release.
“We strongly believe, however, it would be risky not to adjust spending downward at this time, given receipts to date and uncertainty about the road ahead.”
In the Transportation Fund, recent low gasoline prices may have taken a toll on the state’s revenue collections: Gas taxes, excluding diesel, fell almost $1.5 million short in November alone, missing their target by more than 22 percent. Fiscal-year-to-date, the slippage leaves the fund less than $1 million shy of the forecast.
The nonproperty tax sources for the Education Fund — largely consumption taxes — made their targets with $640,000 to spare.
All funds and almost all revenue streams are outperforming metrics for the prior fiscal year. But Spaulding emphasized in his release that, due to the Thanksgiving holiday coming so late last month, that some collections made in November will be attributed to December.
“This difference affects the accuracy of comparisons to monthly targets and year over year performance,” Spaulding said.