Receipts down by $141 million in a single month – delayed tax payments main culprit
May 8, 2020 – Thanks to the Covid-19 economic slowdown, April revenues for the State of Vermont were predictably and dramatically under the consensus forecast for the month, according to a press release issued today by Vermont Secretary of Administration Suzanne Young.
General Fund revenues collected for the month totaled $106.54 million, or -$140.90 million (-56.94%) below their monthly target. In particular, the largest factor in the underperformance was the extension of the federal and state filing deadlines for personal income taxes from April 15 to July 15, 2020. April is typically the largest collections month of the year. The Tax Department reports that 39,000 fewer tax returns were filed in April 2020 compared to April 2019. All major General Fund revenue sources performed below their expectations for the month.
Additionally, the deferrals granted for COVID-19 impacted taxpayers in the bar, restaurant, lodging and retail businesses are reflected in Meals And Rooms Tax collected, which are down -$6.8 million versus April expectations in the General Fund and -$2.4 million in the Education Fund. Sales and Use Tax collections were $5.1 million below the April consensus expectations for the Education Fund as well.
“These results are not unexpected in light of the extension of filing deadlines and deferral of pay-
ments,” said Agency of Administration Secretary Young. “A recent risk assessment by the state and legislative economists projected that of the $191 million of taxes deferred from the general fund in fiscal 2020, $143 million will ultimately be collected in the next fiscal year, while $48 million may be lost permanently.
“That estimate did not take into account the most recent actions taken by the Governor to re-open certain sectors of the economy in the coming weeks and months,” Young said. If recent steps announced are implemented successfully by not increasing public health concerns, then that assessment will likely change and May revenues could improve compared to April.”
Year-to-date, General Fund revenues are -$100.59 million (-7.41%) below their target. Secretary
Young noted: “The State was very fortunate to have experienced strong fiscal performance prior to the COVID-19 pandemic and entered this period with healthy reserves and a predicted surplus, factors that will help lessen the blow dealt by this national emergency.”
The Transportation Fund was -$5.89 million, or -23.58%, below its target for the month, bringing in $19.11 million. Year-to-date, Transportation Fund revenues are -$7.44 million (-3.26%) below expectations. In particular, motor vehicle purchase and use tax revenues and motor vehicle fee revenues performed below expectations.
The Education Fund was -$10.09 million, or -20.97%, below its monthly target, having collected
$38.01 million for the month and was -$11.23 million, or -2.41%, below year-to–date expectations. All state-wide revenue sources attributed to this fund performed below expectations.