MONTPELIER — With two weeks until the Emergency Board meets to set revenue projections for the remainder of fiscal 2021, the state’s coffers contain $163.7 million more than expected, according to the Vermont Legislative Joint Fiscal Office.
Analysts from the Joint Fiscal Office, appearing Friday morning before the House Ways & Means Committee, said most of the additional revenue is flowing into the General Fund as estimated income tax payments. Greater than expected property transfer tax revenue is also adding revenue to that fund, the JFO said.
The general fund accounts for $110 million of the $163.7 million overage and represents a 13 percent increase over its projection for the first six months of fiscal 2021.
The Transportation Fund and Education Fund are also running well ahead of projections, according to the latest figures provided by JFO.
The Education Fund is up $41.9 million above target for the first six months, an increase of 16.2 percent above projections. Most of that increase is driven by sales tax revenue.
JFO senior analyst Graham Campbell told the committee that federal stimulus funds, and federal spending that came into the state through the CARES Act and expanded unemployment benefits, helped drive sales tax revenue.
“People have money in their pockets and they’re using it to buy goods,” he said.
Campbell said the online share of sales tax revenue “has gone through the roof.” It’s believed to be about one-third of the total sales tax revenue to date for FY 21, he said.
The Transportation Fund is $11.6 million above target for the first six months of the year, and Campbell said healthy purchase and use taxes on vehicles and state vehicle fees are driving that increase. Those revenues account for $9.1 million of the $11.6 overage.
“People are using [stimulus funds] to buy stuff, and one of things they’re buying is cars,” Campbell told the committee.
Fuel tax revenue is only slightly above target, however. “It’s weird. People aren’t driving as much as they used to, but they’re buying cars,” Campbell said.
Analysts will have the next round of quarterly estimated tax receipts in hand on January 15. Four days later, at 3 p.m. on Jan. 19, the state Emergency Board is next scheduled to meet and potentially adjust the state’s revenue projections.
Monthly revenue collections have all come in above projections since the fiscal year started on July 1. But administration officials have warned those projections are still below normal revenue levels.
In August, the state’s economists produced a consensus revenue forecast that lowered revenue projections by $181 million for the General Fund, $62.7 million for the Education Fund, and $29.3 million for the Transportation Fund.