(Host) State officials say there’s mixed news in the state’s new revenue report. Administration Secretary Sean Campbell says the November report shows that key elements of the state’s personal income tax continue to perform above projections. Campbell says this is important because the personal income tax is the state’s largest tax source.
The disappointing news, according to Campbell, is a weakness in the state’s two key consumption taxes; the sales tax and the rooms and meals tax. Both tax sources were down roughly 15% last month.
Campbell says it’s a mistake to try to identify economic trends based on a single monthly revenue report. He notes that revenues for the first five months of the current fiscal year have swung sharply from one month to the next. Campbell says overall revenues for the year are right on target, but he says there’s a lot of uncertainty in the months ahead:
(Campbell) “You’ve got the issues of what’s going to happen in Iraq and the pending question of whether or not we go to war, the Christmas shopping season that we’re obviously in the middle of that. And what does that mean – is it robust or is it not? Weather obviously affects Vermont and right now it’s great for winter skiing and that means a lot to us. There’s just so much here that it’s hard to project.”
(Host) Campbell says receipts for the state’s Education Fund are running about a million dollars below projections. The Fund has eight different tax sources and several of them experienced double digit declines in November. Campbell says he’s concerned about the shortfall in the Education Fund but he’s optimistic that the deficit will be erased in the coming months.