[V]ermont continues to see tax revenue coming in at a higher rate than had previously been projected.
On Monday, Vermont’s Secretary of Administration Susanne Young released the state’s revenue update, showing that as of November — after the first five months of fiscal year 2019 — the state’s General Fund, is $30.36 million, or 6.6 percent, above what had been forecast during the previously fiscal year.
But the boost in fiscal 2019, doesn’t come as a surprise to state officials who have said that increases in corporate and personal income tax receipts, spurred largely by changes to federal tax laws last year, have largely contributed to the windfall.
The state’s Education Fund, also saw more revenue than had previously been expected: the fund collected $43.18 million for the month, or $2.33 million above target, according to Young. In the last legislative session, lawmakers moved the sales and use tax to the Education Fund, after its revenues had previously been split with the General Fund.
In a statement accompanying the revenue update, Young suggested that it’s unclear how long Vermont can expect to see the revenue boost, and how much of the revenue will actually remain in the state’s coffers.
“The significant state and federal tax changes passed last year introduce a layer of uncertainty in the timing of revenues and in taxpayer behavior,” she wrote.
“For instance, it is difficult to predict how much of the increase can be attributed to over-estimated withholding and tax payments that could be offset during the tax refund cycle later this fiscal year,” Young said.
Last month, Adam Greshin, the commissioner of the Department of Finance and Management, said he expected that state revenue would see increases topping $30 million in fiscal 2019.
In July, the state’s Emergency Board, the body that sets official revenue forecasts, met to [adjust projections from January] to reflect an additional $18 million in revenue in fiscal year 2019.
In addition, Greshin noted that the state was also expecting an additional $14 million to $15 million surplus from “normal budgetary processes” like increased income from business licensing and dealer fees.
However, he said that most, if not all of this money, will need to be harnessed to cover debt payments owed by the state, including a scheduled increased payment to the state’s massive teacher pension liabilities.
“For all this new revenue coming in, all of it, and more, is already spoken for,” Greshin told legislators at a meeting of the Joint Fiscal Committee in Montpelier last month.
