The State’s General Fund,Transportation Fund, and Education Fund receipts for July were a combined $6.91 million, or 3.5% above monthly consensus expectations. However Administration Secretary Suzanne Young warns that:
- Personal income was down.
- One-time federal money is stimulating purchase of goods and services. Sales taxes from these purchases benefit the state’s Education Fund. The following is a breakdown of the three major state revenue funds:
- General Fund revenues for the month totaled $124.81 million, or $3.04 million above the monthly consensus revenue target.
“While most subcomponents of General Fund revenues performed close to targets, it is worth noting that personal income, which is a good bellwether for the economy, underperformed while one-time inheritance and estate taxes overperformed, creating a net increase in monthly receipts,” Young explained. “It is also important to note, this revenue report for the first month of the fiscal year does not reflect a trend in any major fund or revenue source.”
- The Transportation Fund was $470,000, or 2.16%, above consensus expectations for the month, bringing in $22.03 million.
- The Education Fund (excluding property taxes) was $3.4 million, or 5.97%, above the monthly consensus target, with $60.42 million in total receipts for the month.
“Sales and use taxes continue to fuel the overperformance in the Education Fund, accounting for $2.91 million of the $3.4 million in added revenue,” said Secretary Young.
“Federal policy, like the advance child tax credit and pandemic unemployment assistance coupled with unprecedented federal spending bills like the American Rescue Plan Act is putting more money in Vermonters’ pockets, which they are in turn, using to buy goods and services and propping up Vermont’s economy,” Young said. [Italics added for emphasis.]
“The near-term outlook in the three major funds is strong; however, we must continue to consider these federal policies as onetime events as we build fiscal year 2023 budgets,” Secretary Young said. “If we establish a base level of spending that is not sustainable once this federal funding goes away, we will create a very difficult fiscal environment down the road.”