Last week’s Joint Fiscal Committee meeting was an interesting one; filled with updates, facts and numbers of all kinds. It is too early in the fiscal year to get a good trend line for incoming revenue, but there were some continuing issues showing up in the first two months of the fiscal year (July & August), here are some highlights:
- Personal Income withholding is lower than estimated, while payments to estimated income taxes exceed targets. This has been happening for several years, but it continues beyond estimates.
- The Sales and Use tax is 2% under target so far this fiscal year, and Rooms and Meals tax receipts are 6% above target. Both these facts show up in the funds dependent on these revenue sources.
- Corporate Income tax exceeds all targets, same as the last couple of years. Regular readers will remember the continuing question of why corporations making money are unwilling to hire on more workers and expand.
- September is a month when many taxpayers settle up their tax payments to the state, especially in income tax. So the end of the first quarter of the state fiscal year will be a better indicator of trend.
- The Transportation Fund shows weakness in the Purchase and Use tax as well as collection of DMV fees. The fund is down $2.5 million.
- The Education Fund for various reasons shows non-property tax revenue lower than expected for the first two months of the state fiscal year, July and August, mainly because the Sales and Use tax is running below estimates and also the Purchase and Use tax. The numbers don’t look as bad as they could though for the Ed Fund because lottery tickets are selling well and there have been a couple of big jackpots won. End of FY2016 is expected to show a surplus of around $18.8 million in the Education Fund. There was $4.4 million more collected in property taxes than we spent, and the total property tax adjustment was $8.5 million lower than expected. FY2016 Special Ed expenses came in under budget. I think that was because there were fewer Special Ed eligible students and their cases were not as expensive as usual. Kids may be aging out of having to be paid for by the school district. They would move into another category that would still be paid by the state. Overall the Education Fund is down by $700,000.
- The General Fund is where we pay for a number of the state’s programs. Sales and Use tax is 2% under target, Rooms and Meals is 6% above target. Corporate income tax continues to exceed all estimates.
Areas also covered in the Joint Fiscal committee meeting were the Global Commitment discussions that are ongoing with the federal Health and Human Services Agency and FY2018 budget building beginnings. We learned the revenue versus expenditure shortfall for FY2018 is projected at $30-$40 million.
There is much more information to share on each of these topics. If you are interested… Contact Me!
Rep Carolyn Branagan
Vermont House of Representatives