MONTPELIER — General fund revenues are lagging halfway through the state fiscal year and the administration of new Republican Gov. Phil Scott is preparing for state economists to project a revenue downgrade later this month for the second half of the fiscal year.
New Secretary of Administration Susanne Young released revenue figures for December on Wednesday, which showed the general fund coming in $2.78 million below its monthly target set. Total general fund revenues last month were $127.33 million. The state Emergency Board, compromised of the governor and the chairs of the four money committees in Legislature, last set revenue targets in July 2016. State economists will present a new revenue forecast to the Emergency Board later this month.
The December general fund revenues were hurt by a significant downturn in corporate tax collection last month, according to Young. Corporate taxes raised about $9 million less than expected, or about 50 percent under target. Personal income tax collection did better than expected, however, coming in $5.71 million, or about 8.25 percent, above its target. That helped offset the larger decline in corporate taxes.
December marked the halfway point for the state fiscal year. Through the first six months, the general fund is below the July 2016 revenue forecast by $4 million. That is about 0.6 percent off the mark, Total revenue raised for the first six months tallied $684.54 million, short of the $688.54 million target.
Young said the administration does not expect corporate tax revenue to improve during the remainder of the current 2017 fiscal year.
“The shortfall in corporate revenue in the first half of this fiscal year is a concern and that revenue source is not likely to rebound in the second half of this fiscal year,” Young said. “I expect this trend will be reflected in the updated consensus revenue forecast that will be presented to the Emergency Board next week.”
The Scott administration indicated in the annual budget adjustment information it began presenting to lawmakers on Tuesday that it anticipates needing additional funds to balance the current budget. The administration is proposing to set aside $9.7 million in the mid-year adjustment to help balance the books at the end of the year.
Scott reiterated his campaign pledge in last week’s inaugural address to forego raising any taxes and fees to balance the state’s budget. Instead, Scott promised he would do so with existing state funds.
Meanwhile, December revenue for the state’s transportation fund came in at $21.25 million, just shy of the $21.31 million target. Young said the slight difference was caused by lower-than-expected revenue from the state’s gas tax. Halfway through the fiscal year the transportation fund is $2.33 million below its target.
The education fund also missed its target, collecting $14.77 million last month and missing its mark by about $160,000.
Compared to the 2016 fiscal year, the general fund has raised about 2.5 percent, or more than $16.6 million, so far in 2017. The transportation fund is up 1.41 percent, or 1.83 million over the halfway mark last year, and the education fund is up 0.66 percent, or 0.61 million.