the revised fiscal 2016-18 revenue outlook general fund...
TRANSCRIPT
The Revised Fiscal 2016-18 Revenue Outlook
General Fund, Transportation Fund, and Education Fund
Prepared for the Vermont Emergency Board
January 19, 2016
Prepared by:
Economic & Policy Resources, Inc. 400 Cornerstone Drive, Suite 310
P.O. Box 1660 Williston, Vermont 05495-1660
(802) 878-0346 www.epreconomics.com
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A. Recommended Staff Consensus Forecast Update
The staff recommended update for the consensus forecast this January is a direct result
of a relatively minor, but still significant downgrade in the U.S. and State macroeconomic
forecast for calendar years 2016 through 2017, technical adjustments and updates for
recent and forthcoming developments in key revenue sources, and the likely revenue
receipts impacts of last year’s tax and fee changes enacted by the 2015 Vermont General
Assembly.
The staff recommended consensus revenue forecast update for January 2016 (see
Figure 1 below) includes a small, less than 0.5% forecast downgrade for the G-
Fund of -$4.7 million (or -0.3% relative to the July 2015 consensus forecast) for
fiscal year 2016, and a small forecast downgrade of -$9.1 million (or -0.6% of the
July 2015 consensus forecast) for fiscal year 2017. The staff recommended
consensus forecast recommendation also includes a -$17.4 million forecast
downgrade in the G-Fund (or -1.1% of the July 2015 consensus forecast) for
fiscal year 2018.
Figure 1: Staff Recommended Changes vs. July 2015 Consensus Forecast by Major Fund
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-$10.0 -$8.0 -$6.0 -$4.0 -$2.0 $0.0 $2.0
Education Fund
Transportation Fund
General Fund
Millions of Dollars
Recommended Net Revenue Changes from July 2015 Consensus Forecast
FY2016
FY2017
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The main reasons for the consensus forecast downgrades in the G-Fund forecast from
last July’s consensus forecast are the modest, but still significant downgrades in the
consensus economic forecast and a series of technical corrections and re-specifications
in key tax sources. In addition, revenue receipts from the State’s Winter Tourism season
for fiscal 2016 is likely to be adversely impacted by the season’s very slow start—
including a very sub-par level of activity for the month of December and over the
Christmas-New Year’s Holiday period due to poor weather conditions.
In addition, there are structural changes under way in the Corporate Tax
component of the G-Fund, and the lack of growth in the State’s current Sales &
Use Tax base caused by the growth of e-commerce activity is also weighing in
negatively on the G-Fund forecast.
Moreover, this forecast cycle technical adjustments in the Telephone Property
Tax’s taxable base have weighed significantly and negatively on late fiscal year
2015 and first half fiscal year 2016 revenue receipts in this tax source (with the
second half of fiscal 2016 left-to-go). For fiscal year 2017 and beyond, the
Telephone Property Tax has a re-established taxable base at a new and reduced
level going forward following a comprehensive review by the Vermont
Department of Taxes.
Finally, the positive effects resulting from declining energy prices on household
consumption, business costs, and tourism activity have so far been
disappointing,1 only partially off-setting economic and structural tax-revenue
headwinds listed above and those in previous revenue forecast update reports.2
The staff recommendation for the T-Fund for fiscal year 2016 includes a small forecast
upgrade relative to the consensus revenue forecast approved last July. For fiscal year
2016, the staff recommendation is for a small upgrade of +$0.9 million (or +0.3% versus
the July 2015 consensus forecast) and +$1.1 million forecast upgrade for fiscal year
2017—or +0.4% versus the July 2014 consensus forecast. For fiscal year 2018, the staff
recommendation calls for a +$0.7 million (or 0.3%) increase relative to the consensus
forecast of July 2015 for that fiscal year.
The staff recommended consensus forecast upgrade for those fiscal years in the
T-Fund include full consideration of the changed short-term and long-term
energy price outlook environment that has been transformed by new extraction
1 Apparently, households and businesses are not spending “the energy cost dividend” at a rate that is sufficient to
off-set the negative economic consequences of reduced exploration and production activity. To-date, households and businesses appear instead to be paying down debt or saving the “energy savings dividend.” 2 Such as the end of the Electrical Energy Tax tied to the end of generation of electrical energy at the Vermont Yankee Vernon Station last year—which ended all tax receipts for this component as of fiscal year 2016.
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technologies that have contributed to dramatic increases in supply in the U.S.
and abroad over the past 18 months. Combine with soft global demand,
particularly in natural resource consuming developing countries, the current
period of relatively low energy prices for fossil fuels is expected to last over the
near-term time horizon—for at least the calendar year 2016 period.
For TIB revenues in the T-Fund, the staff recommended forecast update reflects only
minor changes to the two fuel TIB components relative to past forecast updates, with
gasoline price decline-motivated forecast update changes in the Gas Tax TIB component
(including a -$0.1 million recommended staff consensus forecast change in fiscal year
2016, a -$1.1 million staff recommended consensus forecast downgrade for fiscal 2017,
and a -$1.7 million staff recommended consensus forecast downgrade for fiscal year
2018). For the Diesel Tax TIB component, the staff recommended forecast includes
small upgrades of +$0.1 million for fiscal years 2016, 2017, and 2018.
As mentioned in previous forecast update reports, forecasting energy prices over
both the short-term and longer-term time horizon—and gasoline prices and
diesel fuel prices in particular—is a very difficult and uncertain analytical
endeavor. Energy prices as of the current January 2016 consensus forecast
update continue to decline to levels well below what was envisioned as recently
as this past Summer. The future course of energy prices includes a complex
array of geopolitical and technological factors. Because the Gas TIB receipts
forecast relies more heavily on gas prices (versus the role gas prices play in the T-
Fund’s total Gas Tax receipts structure), this consensus forecast update includes
yet another Gas TIB receipts decline over the forecast update time line.
For the E-Fund [Partial], the staff recommended consensus for fiscal year 2016 revenues
through fiscal year 2018 has been downgraded, but by 0.5% (corresponding to $1.0
million) or less. For fiscal year 2016, the staff recommended consensus forecast is for a
$1.0 million (or -0.5%) downgrade, followed by a -$0.5 million downgrade for fiscal year
2017 (or -0.3% versus the July 2015 consensus forecast), and a staff recommended
consensus forecast for fiscal 2018 of -$0.6 million (or -0.3% relative to the July 2015
consensus forecast.
Year-to-year dollar changes in the staff recommended consensus forecast update
for the E-Fund [Partial] reflect current law, and the latest information and
analysis pertaining to the state’s Motor Vehicle Purchase & Use Tax and the
Sales & Use Tax sources which are included in this fund aggregate.
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B. Table for the Staff Recommended Consensus Revenue Forecast by Fund Aggregate
The staff recommended consensus forecast update for January 2016 relative to the consensus forecast approved last July by fund is summarized in Table 1 below.
C. Discussion of Recent Revenue Performance
The January 2016 staff recommended consensus forecast update is a reflection of a mix of factors including a review of recent revenue performance. First half results in the G-Fund for fiscal year 2016 included the following (see Table 2 below).
- Among the components, first half data show that the Personal Income Tax (at -$1.0 million or -0.3% versus its cumulative through December consensus cash flow target), Sales & Use tax (at -$1.5 million or -1.2% below its cumulative
Dollars Percent Dollars Percent Dollars Percent
Education Fund ($1.0) -0.5% ($0.5) -0.3% ($0.6) -0.3%
Total--"Big 3 Funds" ($4.8) -0.3% ($8.5) -0.4% ($17.3) -0.9%
MEMO #1: TIB: [1]
Gasoline ($0.1) -1.0% ($1.1) -8.1% ($1.7) -11.9%
Diesel $0.1 3.2% $0.1 3.6% $0.1 3.6%
Total TIB ($0.1) -0.4% ($1.0) -6.6% ($1.6) -9.9%
Note:
[1] Totals in the TIB may not add due to rounding.
Prepared by: Economic & Policy Resources, Inc.
Table 1: Staff Recommended Consensus Forecast Update-Difference from January 2015 Forecast
2016 2017 2018
FY 2016--Cumulative December Cumulative Cumulative Dollar Percent
Component ($ Thousands) Receipts Target Difference Difference
Personal Income 345,269.6$ 346,257.6$ (988.0)$ -0.3%
Withholding 285,437.1$ 277,229.0$ 8,208.1$ 3.0%
PI Estimates 61,059.2$ 59,506.2$ 1,553.0$ 2.6%
PI Paid Returns 9,468.0$ 11,432.7$ (1,964.8)$ -17.2%
PI Refunds (26,434.7)$ (15,318.8)$ (11,115.9)$ -72.6%
PI Other 15,740.0$ 13,408.5$ 2,331.5$ 17.4%
Net Sales & Use Tax 122,887.8$ 124,366.0$ (1,478.1)$ -1.2%
Corporate Income Tax 50,647.8$ 44,230.5$ 6,417.3$ 14.5%
Corporate Paid Returns 55,473.1$ 53,181.9$ 2,291.2$ 4.3%
Corporate Refunds (4,825.3)$ (8,951.4)$ 4,126.1$ 46.1%
Meals & Rooms 81,525.0$ 80,443.9$ 1,081.0$ 1.3%
Property Transfer Tax 6,411.6$ 6,733.2$ (321.6)$ -4.8%
Other 61,254.1$ 65,114.8$ (3,860.7)$ -5.9%
Estate Tax 7,989.7$ 9,853.2$ (1,863.5)$ -18.9%
Insurance Tax 17,378.1$ 16,362.6$ 1,015.6$ 6.2%
Total Telephone Tax 1,563.5$ 3,553.3$ (1,989.8)$ -56.0%
Bank Franchise Tax 5,013.1$ 5,702.8$ (689.7)$ -12.1%
Fees 10,522.4$ 11,305.8$ (783.4)$ -6.9%
Other 18,787.2$ 18,337.2$ 450.1$ 2.5%
Total Net General Fund 667,995.8$ 667,146.0$ 849.8$ 0.1%
Table 2: Cumulative December Results Versus Target -- General Fund
Basic Data Source: VT Agency of Administration
[1]Figures for the Corporate component are still adjusting to technology changes.
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consensus cash flow target through December), and the “Other” category (at -$3.9 million or -5.9% versus its cumulative consensus cash flow target through December) slightly under-performed, while the other of the “Big Four” components, the Meals & Rooms Tax and Corporate Income Tax, each tracked ahead of their respective cumulative consensus cash flow targets for the first half of fiscal year 2016.
- The Corporate Income Tax had a particularly notable +$6.4 million or +14.5% ahead of its cumulative consensus cash flow target through December, which helped to off-set the under-performance of other components over the first half of fiscal year 2016.
- The Estate Tax (at -$1.9 million or -18.9% of its through December cumulative consensus cash flow target) spent most of the first half of FY 2016 with below-target monthly receipts. However, this tax source rebounded during the month of December, with $3.2 million in receipts during the month.
- The major negative drag on the G-Fund during the first half of the fiscal year came from higher than expected refunding activity in the Personal Income Tax component. While this source so far has experienced roughly $11.1 million in higher than expected refunds over the first half of FY ’16, this activity was partially off-set by the above-target performance of +$8.2 million in the PI Withholding sub-component. Among the “other” PI components, the ups and downs were essentially “off-setting.”
Looking at the T-Fund performance through the first half of fiscal year 2016, receipts in the T-Fund (non TIB) through December finished +$1.4 million or +1.1% above the consensus cumulative target (see Table 3 below).
Despite relatively low crude oil and corresponding gasoline prices during calendar year 2015, both Gasoline and Diesel fuel taxes are tracking ahead of their cumulative consensus targets for the end of December by +$0.6 million (+1.5%) and +$0.4 million (+4.6%). MvFees also outperformed its cumulative consensus cash flow target for December by +$1.2 million (+3.1%).
FY 2016--Cumulative December Cumulative Cumulative Dollar Percent
Component ($ Thousands) Receipts Target Difference Difference
Gasoline Tax (non-TIB) 41,031.9$ 40,441.9$ 590.0$ 1.5%
Diesel Tax (non-TIB) 9,684.5$ 9,262.4$ 422.1$ 4.6%
MvP&U Tax 33,055.5$ 33,084.0$ (28.6)$ -0.1%
MvFees 38,104.1$ 36,951.5$ 1,152.5$ 3.1%
Other Fees-Revenues 8,703.7$ 9,415.7$ (712.0)$ -7.6%
Total Transportation Fund (no TIB) 130,579.7$ 129,155.6$ 1,424.1$ 1.1%
Gasoline -TIB 7,018.7$ 7,052.7$ (34.1)$ -0.5%
Diesel-TIB 983.9$ 959.7$ 24.2$ 2.5%
Total Transportation Fund (w/TIB) 138,582.2$ 137,168.0$ 1,414.3$ 1.0%
Table 3: Cumulative December Results Versus Target --Transportation Fund
Basic Data Source: VT Agency of Administration
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MvP&U and the T-Fund “Other Fees” account also underperformed versus
their cumulative consensus targets for December, by -$0.1 million (-0.1%, essentially an on-target performance) and -$0.7 million (-7.6%).
Through the first half of fiscal year 2016, revenues in the TIB categories were mixed, with Diesel TIB posting an above target performance (at +$0.1 million or +2.5% versus cumulative consensus cash flow target). Gas TIB receipts, however, ended December -$0.1 million or -0.5% versus cumulative consensus cash flow target. Each of these components missed their respective cumulative targets by less than $1.0 million, essentially an “on-target” performance.
The staff recommended forecast update reflects the reality of the on-going
trough in fuel prices and consumption.
Net revenues available to the E-Fund [Partial] after the first half of fiscal year 2015 receipts finished behind cumulative consensus target by -$0.7 million or -0.7% versus cumulative consensus cash flow target (see Table 4 below).
- The lower than expected performance in the G-Fund-related Sales & Use Tax and the T-Fund-related MvP&U Tax also translated to the E-Fund. The Lottery Transfer component was a positive influence on the overall E-Fund’s [Partial] aggregate receipts, but not enough to bring the E-Fund into positive territory.
- The staff recommended update for the E-Fund reflects the forecast updates for the two consumption tax sources going forward.
Similar to the previous two forecast updates in July and January of CY 2015, this current forecast update involves a considerable level of uncertainty—driven by a number of issues. These issues include increasing volatility in key tax sources, increasing uncertainty in the economic outlook as the current economic upturn ages, and the reliance of a good part of the year-to-year revenue growth that is tied to the tax-fee changes that were passed during the 2015 Vermont General Assembly.3
3 For example, this consensus forecast update accepts the +$22.9 million Personal Income Tax revenue impact estimates for FY 2016 calculated by the Chainbridge impact software of the Legislative Joint Fiscal Office. This assumption means that the Spring 2016 filing season will need to be an all-time record for the PI Tax—on top of last year’s record. This analytical tool is still unproven and it is uncertain whether or not these increased revenues will actually be realized during fiscal year 2016 and beyond.
FY 2016--Cumulative December Cumulative Cumulative Dollar Percent
Component ($ Thousands) Receipts Target Difference Difference
Sales & Use Tax 66,168.1$ 66,966.3$ (798.1)$ -1.2%
MvP&U Tax 16,527.7$ 16,542.0$ (14.3)$ -0.1%
Lottery 9,954.2$ 9,812.2$ 142.0$ 1.4%
Interest 43.7$ 27.7$ 16.0$ NM
Total Education Fund [Partial] 92,693.7$ 93,348.1$ (654.4)$ -0.7%
Table 4: Cumulative December Results Versus Target --Education Fund [Partial]
Notes: NM=Not Meaningful
Basic Data Source: VT Agency of Administration
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- Regarding the first, the State G-Fund over the past two economic cycles has become significantly more dependent on the Personal Income Tax and Corporate Income Tax as a percent of total G-Fund revenues over a surprisingly short period of time. Since fiscal year 2002, the percentage of total G-Fund revenues accounted for by these two tax sources that go up and down with the economy has increased by 9.4 percentage points as a percentage of total G-Fund receipts.
- A percentage like this tends to move much slower than what has been experienced in Vermont since fiscal year 2002. The increasing dependence of the G-Fund on the PI Tax and Corporate makes the G-Fund performance more “at risk” and volatile.
- A good share of the PI Tax and Corporate Tax increase has been attributable to the most volatile and unpredictable component of the G-Fund of all—the Corporate Tax.
- Over the last two cycles, the Corporate Tax component as a percent of the G-Fund total has increased by 4.0 percentage points—if the updated consensus revenue forecast for fiscal year 2016 holds.
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50.9% in FY 2002
58.1% in FY 2008
60.3% in FY 2016 Est.A 9.4 percentage point increase over 14 years for an indicatorthat typically moves glacially!
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- The current consensus forecast for fiscal year 2016 follows an 8.9% of the G-Fund performance for the Corporate Tax in fiscal year 2015—1.7 percentage points higher than the current staff recommended consensus forecast for the Corporate Tax for fiscal year 2016.
- This comes at a time when the dynamics of the Corporate Tax receipts environment is changing as corporate profits decline nationally.
- Add that the always volatile Estate Tax component, and a total of over +$880.0 million of the $1,428.6 million in G-Fund revenues are accounted for by these economically sensitive sources—which grows to almost 90% (or 89.7% of the staff recommended consensus forecast update total) when the Sales & Use and Rooms & Meals Taxes are added to these components.
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3.0% in FY 2002
7.8% in FY 2011
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The Energy Sector accounts for a large part of the U.S. corporate profits decline...which will not impact Vermont...
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Looking ahead, it is uncertain how much longer the G-Fund can in fact continue to rely on such volatile tax sources. Future receipts have significant downside risk going forward.
In terms of the economic environment, what the economic upturn has lacked in terms of its robustness, it has made up in its duration—at 79 months old—which is more than 20 months longer than the average post-World War II economic upturns (at 59 months).
The current upturn ranks as the 4th longest since World War II, and the 5th longest ever—dating back to 1854—when these business cycle records first started.
There currently are no signs of the type of imbalances that typically are precursors of
a forthcoming period of economic recession in the near-term future through the rest of fiscal year 2016 and into at least the first half of fiscal year 2017.
If the upturn lasts until the end of fiscal year 2018 (or June of calendar year 2018),
the then 108 month upturn will be the second longest upturn, both since World War II and also back to when such records started to be kept back in 1854.
Although the current economic upturn has not been without its problems, almost seven years of “upturn” has resulted in significant output and labor market gains—with nearly 14 million jobs gained and an unemployment rate (at 5.0%) that is approaching full-employment.
The labor market gains nationally have also helped to reduce the number of long-term unemployed—a problem that has plagued the U.S economy since the onset of the “Great Recession” back in calendar year 2007.
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Unemployment RateQuarterly Job Change (Ths.)
U.S. Employment Situation: Jobs and Unemployment(June 2007 to December 2015, BLS)
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The chart below displays the gradually-retreating unemployment rate (U-3), showing that, while the labor market overall for this indicator is still weaker than before the recession, it is in fact now showing significant improvement.
The most expanded view of unemployment, U-6—which measures the total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons (but would prefer to work full-time) as a percent of the civilian labor force—remains high at 9.9%.
However, the month of December marked the first time since the last recession
that the U-6 unemployment rate declined to below 10.0% (since June 2008). These data include the part of the labor force that is not working full-time—but would prefer to be working full-time (or is underemployed).
The current economic upturn, following the 2007-08 financial crisis and the “Great Recession,” was supported by an unprecedented fiscal policy stimulus.
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The current economic upturn also was supported by an unprecedented period of roughly “zero percent” short-term interest rates and expansion of the Federal Reserve’s balance sheet—which expanded greatly during the initial period following the financial crisis and during the Fed’s policy of “quantitative easing.”
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The upturn also has been aided by a surprisingly pronounced and enduring decline in fossil fuel prices, which has been deeper and longer than almost everyone has expected.
- The price decline in fossil fuel is now expected to persist through much if not all of calendar year 2016—and possibly longer. This will have significant effects on the energy cost budgets of households, businesses and visitors to Vermont.
But the uplifting effect of declining oil prices seems to have run into concerns about the weakening of the global economy such as China and other key commodity-based economies in the developing world (Brazil, Russia, Australia, and many countries on the African continent), volatility in the U.S. Stock market, and weakness in U.S. manufacturing brought about by the strengthening U.S. dollar which makes U.S. exports less “price competitive.”
- These complicating factors have weighed heavily on the collective psyche of consumers—still with the memory of all of the uncertainty surrounding the “Great Recession.”
As a result, the Conference Board’s Index of Consumer Confidence has drifted sideways during much of calendar year 2015—finishing the year at a level that was actually somewhat below the level for the index way back at the beginning of calendar year 2015.
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West Texas Intermediate Crude Oil, PPB in December 2015 Constant Dollars
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(April 2011 - $115 per Barrel)
(December 2015- $37 per Barrel)
(Source: U.S. Energy Information Administration)
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- As has the U.S. stock market, which posted its first calendar year price decline since 2008, finishing calendar year 2015 at -0.73% on a year-over-year basis.
- In fact through the first two weeks of calendar year 2016, all three major stock market indexes are off by more than 8.0%.
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-14
Ju
n-1
4
Oct-1
4
Feb
-15
Ju
n-1
5
Oct-1
5
Ind
ex (
100 =
1985
)Consumer Confidence Index, Through December 2015
(Source: The Conference Board)
2011 Debt Ceiling Debate
Lehman Brothers Failure
Federal Shutdown 2015
0.00
500.00
1000.00
1500.00
2000.00
2500.00
20
06
-01
-05
20
07
-01
-05
20
08-
01-
05
20
09
-01
-05
20
10
-01
-05
20
11
-01
-05
20
12
-01
-05
20
13
-01
-05
20
14
-01
-05
20
15
-01
-05
20
16
-01
-05
S&P
50
0 In
dex
Val
ue
Standard & Poor's 500 Index(Source: Federal Reserve Bank of St. Louis)
(October 9, 2007 - 1,565)
(March 9, 2009 - 677)
(May 18, 2015 - 2,129)
14
On the policy front. The Federal Reserve has now begun a period of “policy normalization” that includes short-term rate increases and a reduction in its balance sheet holdings of various debt instruments which has grown substantially in recent years.
- The Federal Stimulus program also had a downside, as the sharp increase in federal debt outstanding since calendar year 2000 has reduced the financial-fiscal capacity of the U.S. government to take on any future economic challenges.
-
500
1,000
1,500
2,000
2,500
3,000
1970
-01-
01
1971
-10-
01
1973
-07-
01
1975
-04-
01
1977
-01-
01
1978
-10-
01
1980
-07-
01
1982
-04-
01
1984
-01-
01
1985
-10-
01
1987
-07-
01
1989
-04-
01
1991
-01-
01
1992
-10-
01
1994
-07-
01
1996
-04-
01
1998
-01-
01
1999
-10-
01
2001
-07-
01
2003
-04-
01
2005
-01-
01
2006
-10-
01
2008
-07-
01
2010
-04-
01
2012
-01-
01
2013
-10-
01
Deb
t ($
Bill
ion)
Federal Debt Held by Federal Reserve Banks
(Source: Federal Reserve Bank of St. Louis)
0.0
2000.0
4000.0
6000.0
8000.0
10000.0
12000.0
14000.0
16000.0
18000.0
20000.0
19
39
19
42
19
45
19
48
19
51
19
54
19
57
19
60
19
63
19
66
19
69
19
72
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
Fe
de
ral
De
bt
($B
illi
on
s)
Gross Federal Debt Outstanding(Source: Federal Reserve Bank of St. Louis)
15
- But inflation remains firmly under control, giving the Federal Reserve at least some flexibility in its execution of the “normalization” of monetary policy.
D. Discussion of Recent Vermont Economic Trends
- Turning to the Vermont data, the seasonally adjusted payroll job count appears to
continue to bounce back and forth, registering an uptick—following a disappointing performance in third quarter of calendar year 2015. October and November (with November being the most recent month where data are available—as December data have not yet been published) saw a positive performance.
- However, given the recent “up and down” pattern to activity, it is too early to conclude that the Vermont economy is out of the long-standing month-to-month “ups-and-downs” which began back in early calendar year 2014.
- Payroll job changes have for the most part bounced back and forth month-to-month, dating to January 2014. September’s and October’s relatively upbeat job performances hopefully represent a possible and positive break of that past trend
1.61%
2.25%2.69%
3.39%3.23%
2.85%
3.84%
-0.36%
1.64%
3.16%
2.07%
1.46%
1.62%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Consumer Price Index - All Urban ConsumersYear-over-Year Change
CPI - U CPI - U less Food & Energy
16
- Despite the choppy job creation pattern over the last two years, Vermont has fared reasonably well in non-seasonally adjusted year-over-year job creation.
Tables 5 and 6 below compare the Total Nonfarm and Private sector payroll job changes by state on a year-over-year basis by major North American Industry Classification System (NAICS) sector.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
Jun-0
7
Sep-0
7
De
c-0
7
Ma
r-0
8
Jun-0
8
Sep-0
8
De
c-0
8
Ma
r-0
9
Jun-0
9
Sep-0
9
De
c-0
9
Ma
r-1
0
Jun-1
0
Sep-1
0
De
c-1
0
Ma
r-1
1
Jun-1
1
Sep-1
1
De
c-1
1
Ma
r-1
2
Jun-1
2
Sep-1
2
De
c-1
2
Ma
r-1
3
Jun-1
3
Sep-1
3
De
c-1
3
Ma
r-1
4
Jun-1
4
Sep-1
4
De
c-1
4
Ma
r-1
5
Jun-1
5
Sep-1
5
Unemployment Rate
Vermont Jobs - Unemployment (S.A.) June 2007 - November 2015
Source: U.S. Bureau of Labor Statistics; Boston Federal Reserve Bank
Job Gains Job Losses Unemployment RateChange In Jobs ( Thousands)
Table 5: Year-Over-Year Job Change by State Table 6: Year-Over-Year Job Change by State
Total Payroll Jobs (November 2014-November 2015) Private Sector Payroll Jobs (November 2014-November 2015)
Rank State % Change Rank State % Change
1 Idaho 4.1% 1 Idaho 5.0%
2 Utah 3.6% 2 Utah 3.9%
3 Florida 3.0% 3 Florida 3.6%
4 Washington 2.8% 4 Washington 3.1%
5 Oregon 2.7% 5 South Carolina 3.0%
6 South Carolina 2.6%
7 California 2.6% 8 California 2.8%
11 Massachusetts 2.2% 14 Massachusetts 2.3%
15 New York 2.3%
17 New York 1.9%
20 Rhode Island 2.1%
23 Rhode Island 1.7%
24 Connecticut 1.6% 24 Connecticut 1.9%
25 Texas 1.5%
28 Texas 1.6%
32 Vermont 1.3%
33 Maine 1.2% 32 Maine 1.5%
40 Pennsylvania 0.7% 37 New Hampshire 1.1%
41 New Hampshire 0.6% 38 Vermont 1.1%
46 Oklahoma -0.1% 46 Oklahoma -0.2%
47 Louisiana -0.6% 47 Louisiana -0.3%
48 Wyoming -0.8% 48 Wyoming -1.4%
49 West Virginia -1.4% 49 West Virginia -1.5%
50 North Dakota -2.8% 50 North Dakota -3.5%
Source: U.S. Department of Labor, BLS Source: U.S. Department of Labor, BLS
17
- From the tables, it seems apparent that Vermont has improved in the national and New England rankings, and established a +1.3% year-over-year growth rate during the month of November.
- Total Private sector payroll job growth over the November 2014-November 2015 period, registered a +1.1% gain over the last year.
Vermont’s best year-over-year performer is the Information sector, with job additions on a year-over-year basis of +4.3%. That performance ranks Vermont’s 4th in terms of its ranking among the 50 states within the Information NAICS sector.4
- Growth in Vermont’s Education and Health Services sector, at +3.3% year-over-year, is ranked 14th in the U.S and 1st in New England. The Government sector grew by +2.2% year-over-year after November 2015, ranking Vermont 2nd nationally, while Leisure and Hospitality expanded by +1.5%, ranking 38th nationally.
4 NAICS refers to the North American Industry Classification System.
% Change VT Rank in VT Rank in Highest Ranked # of States Reporting
Industry Supersector in VT New England U.S. New England State Job Losses
Total Nonfarm 1.3% 4 32 MA (11) 5
Total Private 1.1% 6 38 MA (14) 5
Construction 1.3% 4 40 MA (14) 6
Manufacturing -1.9% 6 41 RI (8) 23
Information 4.3% 2 4 NH (1) 23
Financial Activities 0.0% 5 40 CT (24) 10
Trade, Transportation, Utilities -0.2% 4 42 NH (7) 9
Leisure and Hospitality 1.5% 5 38 RI (2) 6
Education and Health Services 3.3% 1 14 VT (14) 1
Professional and Business Services -0.4% 5 46 RI (3) 9
Government 2.2% 1 2 VT (2) 16
Notes: NAICS means North American Industry Classification System
Source: U.S. Bureau of Labor Statistics
Table 7: Payroll Job Performance By NAICS Supersector November 2014 vs. November 2015
18
The weakest year-over-year job changes have come in the Manufacturing sector with a -1.9% decline from November of 2014 to November of 2015.
- Vermont’s higher than average reliance on manufacturing activity has been a drag on
job growth in recent times as the factory sector has slowed with the increase in the value of the U.S. dollar—particularly relative to the Canadian dollar.
- In addition, Vermont’s Professional & Business Services and Trade, Transportation,
& Utilities sectors shed -0.4% and -0.2% of its jobs from November 2014 to November 2015, ranking it 46th and 42nd in the nation, respectively.
Just as the U.S. business cycle has become longer, so too has the economic cycles for the
State of Vermont. The chart below compares the level of payroll job loss and recovery versus the job count peak for the past few recessions, focusing on the period corresponding to the “Great Recession.”
- The chart shows that job market recoveries in the more recent recessions are generally lengthening—meaning that it appears that business cycles overall may be becoming longer as well. Even though the month-to-month flow has been up and down, the employment level overall continues to make gains over its pre-recession peak.
- As of November 2015 (the latest month for which state-by-state payroll job data are available), Vermont has surpassed the peak employment level reached in June 2007 by 6,900 jobs—adding 46.9% more than the number of jobs lost during the “Great Recession” in the State.
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
$2.00
60.0
70.0
80.0
90.0
100.0
110.0
120.0
Jan-
92
Jan-
93
Jan-
94
Jan-
95
Jan-
96
Jan-
97
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13
Jan-
14
Jan-
15
Jan-
16
U.S. Dollar vs. Major Currencies - Left Scale (Index 1973=100)
Canada / U.S. Foreign Exchange Rate (Dollars) - Right Scale
The U.S. Dollar Has Strengthened Against Most Currencies (Includingthe Canadian Dollar), Increasing the Prices of U.S. Goods for Export...
Source: Federal Reserve Bank of St. Louis
19
- Vermont was the second state in the New England region (following the state of Massachusetts) to complete its full labor market recovery, despite the noteworthy job reductions in some key Vermont employment sectors (e.g. the high paying Durable Goods manufacturing) over the past two years.5
Turning to housing markets, housing prices—as measure by the Federal Housing Finance Agency’s price index (FHFA) increased again in Vermont during the 3rd quarter of calendar year 2015 leaving the State just 0.8% below its previous mid-2000s housing price peak.
- This most recent reading for Vermont represented a +2.9% year-over-year price increase, with the highest performing New England regional neighbor—the State of Massachusetts, finishing the quarter at a total of +14.6% off its price trough or bottom (and +4.8% over the last year alone), but still 4.9% below its mid-2000’s price peak.
Overall, FHFA housing prices form the 3rd quarter of calendar year 2015 increased on a year-over-year basis for all 50 states and have done so for the last 6 consecutive quarters dating back to early calendar year 2014.
- Among the 50 states, a total of 19 states have reached their pre-recession peaks as of the 3rd quarter of calendar year 2015.
5 Most recently, these reductions have included Keurig Green Mountain (in the food sector), Global Foundries (and its predecessor IBM), and now Energizer in Bennington (both in the electric and electronic manufacturing sector).
-7.0%
-6.0%
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99
Perc
en
t C
han
ge F
rom
Peak
Months Since Employment Peak
VT Payroll Jobs -- Current Versus the Past 5 Recessions(Source: VT DOL, SA)
1980 1974 1981 2001 1991 Current
20
Price recovery is important because it is a precursor to more normal levels of activity in housing construction. So far, this upturn construction activity remains subdued, with residential and non-residential activity lagging behind activity levels last decade.
The following tables present the updated consensus forecast for key macroeconomic variables employed in the consensus revenue forecast update.
-0.8%
-6.8%
-4.9%
-16.5%
-11.2%
-20.3%
0.0%
-2.6%
-6.0%
-10.3%
-16.0%
-22.3%
-25.3%
-30.6%
2.9%
1.9%
4.8%
1.2%
4.4%
4.5%
5.8%
2.7%
3.6%
6.2%
7.7%
7.8%
9.7%
10.8%
-50.0% -40.0% -30.0% -20.0% -10.0% 0.0% 10.0% 20.0%
Vermont
Maine
Massachusetts
Connecticut
New Hampshire
Rhode Island
North Dakota
Pennsylvania
New York
Michigan
California
Arizona
Florida
Nevada
Change in House Prices "From Peak [RED]" and "Last 4 Quarters" [Green] FHFA Data--Thru Q3: 2015 [All Transactions]
21
TABLE 8 Comparison of Recent Consensus U.S. Macroeconomic Forecasts
June 2014 through December 2015, Selected Variables, Calendar Year Basis
2009 2010 2011 2012 2013 2014 2015 2016 2017
Real GDP Growth June-14 -2.8 2.5 1.8 2.8 1.9 2.8 3.9 3.2 2.8 December-14 -2.8 2.5 1.6 2.3 2.2 2.2 3.6 3.8 3.1 June-15 -2.8 2.5 1.6 2.3 2.2 2.4 2.6 3.2 3.0 December 2015 2.8 2.5 1.6 2.2 1.5 2.4 2.5 2.9 3.1 S&P 500 Growth (Annual Avg.) June-14 -22.5 20.3 11.4 8.7 19.1 13.1 3.4 -5.5 4.8 December-14 -22.5 20.3 11.4 8.7 19.1 17.5 7.1 1.3 2.2 June-15 -22.5 20.3 11.4 8.7 19.1 17.5 7.8 1.9 2.3 December 2015 -22.5 20.3 11.4 8.7 19.1 17.5 -0.7 2.7 4.8 Employment Growth (Non-Ag) June-14 -4.4 -0.7 1.2 1.7 1.7 1.8 2.4 2.4 1.9 December-14 -4.4 -0.7 1.2 1.7 1.7 2.0 2.4 2.6 1.7 June-15 -4.4 -0.7 1.2 1.7 1.7 1.9 2.2 2.2 2.3 December 2015 -4.4 -0.7 1.2 1.7 1.7 1.9 2.1 2.0 2.0 Unemployment Rate June-14 9.3 9.6 8.9 8.1 7.4 6.3 6.0 5.7 5.2 December-14 9.3 9.6 8.9 8.1 7.4 6.2 5.4 5.1 4.8 June-15 9.3 9.6 8.9 8.1 7.4 6.2 5.3 4.9 4.7 December 2015 9.3 9.6 8.9 8.1 7.4 6.2 5.3 4.8 4.7 West Texas Int. Crude Oil $/Bbl June-14 62 79 95 94 98 100 103 104 105 December-14 62 79 95 94 98 94 63 76 81 June-15 62 79 95 94 98 94 58 70 79 December 2015 62 79 95 94 98 93 49 55 64 Prime Rate June-14 3.25 3.25 3.25 3.25 3.25 3.25 3.37 5.00 6.30 December-14 3.25 3.25 3.25 3.25 3.25 3.25 3.37 5.12 6.52 June-15 3.25 3.25 3.25 3.25 3.25 3.25 3.30 4.70 6.20 December 2015 3.25 3.25 3.25 3.25 3.25 3.25 3.26 3.97 5.74 Consumer Price Index Growth June-14 -0.3 1.6 3.1 2.1 1.5 1.9 2.2 2.5 2.6 December-14 -0.3 1.6 3.1 2.1 1.5 1.6 1.5 2.3 2.6 June-15 -0.3 1.6 3.1 2.1 1.5 1.6 0.5 2.5 2.6 December 2015 -0.3 1.6 3.1 2.1 1.5 1.6 0.2 2.2 2.9 Avg. Home Price Growth June-14 -5.5 -4.0 -3.7 -0.1 4.1 4.9 5.6 6.4 5.8 December-14 -5.5 -4.0 -3.7 -0.1 4.1 5.7 5.0 5.4 5.7 June-15 -5.5 -4.1 -3.7 -0.1 4.1 5.7 4.7 5.1 5.5 December 2015 -5.5 -4.1 -3.8 -0.1 4.0 5.6 5.5 5.7 5.9
22
TABLE 9 Comparison of Consensus Administration and JFO Vermont State Forecasts June 2013 through December 2015, Selected Variables, Calendar Year Basis
2009 2010 2011 2012 2013 2014 2015 2016 2017 Real GSP Growth June-13 -2.9 5.6 1.3 1.2 1.3 3.0 4.2 2.9 December-13 -2.9 5.6 1.3 1.2 1.4 3.1 4.1 2.9 2.2 June-14 -2.8 5.6 1.3 1.2 0.5 2.9 4.0 3.2 2.4 December-14 -2.5 4.4 2.2 1.1 1.9 1.0 3.3 3.6 2.8 June-15 -2.5 4.4 2.2 1.1 1.9 1.2 2.4 3.0 2.6 December 2015 -2.4 3.7 2.8 0.4 -0.3 0.6 2.2 2.8 2.4 Population Growth June-13 0.1 0.2 0.1 -0.1 0.3 0.3 0.3 0.4 December-13 0.1 0.2 0.1 -0.1 0.1 0.1 0.1 0.2 0.2 June-14 0.1 0.2 0.1 -0.1 0.1 0.1 0.1 0.2 0.2 December-14 0.1 0.2 0.1 0.0 0.1 0.0 0.1 0.2 0.3 June-15 0.1 0.2 0.1 -0.1 0.1 -0.1 -0.1 0.2 0.2 December 2015 Employment Growth June-13 -3.3 -0.2 0.7 1.2 1.0 0.9 2.2 1.9 December-13 -3.3 -0.2 0.7 1.2 1.0 1.3 2.2 1.9 1.4 June-14 -3.3 0.3 0.8 1.3 0.5 1.4 2.0 1.8 1.6 December-14 -3.3 0.3 0.8 1.3 0.5 1.0 1.6 1.9 1.3 June-15 -3.3 0.3 0.9 1.3 0.8 1.0 1.7 1.9 1.8 December 2015 -3.3 0.3 0.9 1.3 0.8 1.0 1.6 1.7 1.8 Unemployment Rate June-13 6.9 6.4 6.6 5.0 4.4 4.1 3.6 3.3 December-13 6.9 6.4 5.6 5.0 4.4 4.1 3.6 3.3 3.0 June-14 6.9 6.4 5.6 4.9 4.4 3.9 3.6 3.3 3.0 December-14 6.9 6.4 5.6 4.9 4.4 3.7 3.5 3.2 2.9 June-15 6.6 6.1 5.5 4.9 4.4 4.1 3.6 3.2 2.9 December 2015 6.6 6.1 5.5 4.9 4.4 4.1 3.7 3.4 3.3 Personal Income Growth June-13 -2.2 3.3 4.7 3.4 1.0 2.8 4.2 3.7 December-13 -2.2 3.3 4.7 3.4 3.8 5.7 6.2 5.1 4.5 June-14 -1.4 1.7 7.1 3.7 2.9 4.9 5.6 5.0 4.6 December-14 -1.4 1.7 7.1 3.7 2.9 3.8 5.1 5.4 4.7 June-15 -1.4 1.6 7.2 3.4 2.5 4.0 4.8 5.2 4.7 December 2015 -2.0 2.2 6.8 3.6 1.4 3.5 4.5 5.1 4.6 Home Price Growth (JFO*) June-13 -2.0 -1.1 -0.5 0.5 0.7 1.5 2.0 3.2 December-13 -2.0 -1.2 -0.6 0.5 0.5 1.5 2.1 3.1 3.7 June-14 -2.1 -1.2 -0.6 0.5 0.2 0.4 1.7 2.9 3.7 December-14 -2.1 -1.2 -0.6 0.5 0.2 0.9 2.1 2.7 3.4 June-15 -2.1 -1.2 -0.7 0.4 0.2 0.7 2.3 2.8 3.4 December 2015 -2.1 -1.2 -0.8 0.4 0.1 0.7 2.5 2.9 3.4
23
E. Notes and Comments on Methods:
All figures presented above are presented as described, including current law “net” revenues for the respective funds listed in the consensus forecast estimate for fiscal years 2016, 2017, and 2018 that are part of the official Emergency Board motion.
The revenue forecasting process is a collaborative one involving the staff of the Vermont Department of Taxes, VTrans, the Legislative Joint Fiscal Office, Kavet Rockler & Associates, LLC, and many others throughout state government and the staff of Economic & Policy Resources. Special thanks are due to Sharon Asay (of the Vermont Department of Taxes), Mary Cox (of the Vermont Department of Taxes), Victor Gauto (of the Vermont Department of Taxes), Doug Farnham (of the Vermont Department of Taxes), Terry Edwards (of the Vermont Department of Taxes), Lenny LeBlanc of VTrans), Sara Teachout, Stephanie Barrett, Catherine Benham, Neil Strickner, Theresa Utton-Jerman, and Mark Perrault (of the JFO), and many others in both the Administration and the JFO. All contributed time and energy to assembling data, providing analysis, or technical assistance that was crucial to completing these forecasts.
The consensus forecasting process involves the discussion and agreement of two independent forecasts completed by Thomas E. Kavet of the JFO and the staff at Economic & Policy Resources. Agreement on the consensus forecast occurs after a complete discussion-vetting and reconciliation of these independent forecasts.
The State continues to develop an internal State macroeconomic model which may eventually replace the model maintained at Moody’s Analytics through the New England Economic Partnership (NEEP). The NEEP forecast for Vermont is managed by Economic & Policy Resources, Inc., who also currently supports the Vermont Agency of Administration with the Administration’s part of the consensus forecasting process. Since October of 2001, input and review of initial Vermont NEEP model design and output prior to its release has been provided by KRA, as the State Economist and Principal Economic Advisor to the Vermont Legislature. In May of 2015, the NEEP organization did not develop a Vermont macro forecast. The macro forecast employed at that time was independent of the NEEP forecasting process. The November 2015 NEEP forecast was developed using the internal State macroeconomic model used to inform this forecast update in terms of the macroeconomic environment or background. Dynamic and other input/output-based models for the State of Vermont, including those from Regional Economic Models, Inc. (REMI), the REDYN input-output model as currently maintained by Economic Analytics, LLC, and IMPLAN are also occasionally employed in the analytic process for completing the consensus economic and revenue forecasts.
24
G. Detailed Forecast Tables.
25
SO
UR
CE
G-F
UN
D
revenues a
re p
rior
to a
ll E
-Fund a
llocations
and o
ther
out-
transfe
rs. U
sed for
FY
2012
%F
Y 2
013
%F
Y 2
014
%F
Y 2
015
%F
Y 2
016
%F
Y 2
017
%F
Y 2
018
%
analy
tic a
nd c
om
para
tive p
urp
oses o
nly
.(A
ctu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
RE
VE
NU
E S
OU
RC
E
Pers
onal In
com
e$597.0
7.9
%$660.6
10.7
%$671.1
1.6
%$705.9
5.2
%$760.8
7.8
%$793.7
4.3
%$817.0
2.9
%
Sale
s &
Use*
$341.8
5.0
%$346.8
1.4
%$353.6
2.0
%$364.6
3.1
%$378.3
3.8
%$392.1
3.6
%$403.9
3.0
%
Corp
ora
te$85.9
-4.2
%$95.0
10.5
%$94.8
-0.1
%$121.9
28.5
%$104.2
-14.5
%$92.6
-11.1
%$89.8
-3.0
%
Meals
and R
oom
s$126.9
3.5
%$134.8
6.2
%$142.7
5.9
%$150.8
5.7
%$155.6
3.2
%$161.3
3.7
%$166.8
3.4
%
Cig
are
tte a
nd T
obacco**
$80.1
9.9
%$74.3
-7.2
%$71.9
-3.3
%$76.8
6.7
%$79.4
3.4
%$76.3
-3.9
%$74.1
-2.8
%
Liq
uor
and W
ine
$16.4
7.0
%$17.0
3.4
%$17.7
4.0
%$18.2
2.9
%$18.3
0.7
%$19.0
3.8
%$19.6
3.2
%
Insura
nce
$56.3
2.5
%$55.0
-2.3
%$57.1
3.7
%$55.3
-3.1
%$57.0
3.1
%$57.7
1.2
%$58.4
1.2
%
Tele
phone
$9.6
-15.3
%$9.4
-2.6
%$9.1
-2.9
%$7.7
-14.9
%$3.1
-60.0
%$6.3
103.2
%$6.1
-3.2
%
Bevera
ge
$6.0
3.3
%$6.2
3.3
%$6.4
3.6
%$6.7
4.2
%$6.8
2.1
%$7.0
2.9
%$7.2
2.9
%
Ele
ctr
ic**
*$2.9
0.3
%$8.9
204.5
%$13.1
46.9
%$9.4
-28.2
%$0.0
NM
$0.0
NM
$0.0
NM
Esta
te**
**$13.3
-62.8
%$15.4
15.4
%$35.5
131.0
%$9.9
-72.2
%$20.5
107.3
%$22.1
7.8
%$23.6
6.8
%
Pro
pert
y$24.1
-6.0
%$28.5
18.3
%$30.9
8.5
%$33.6
8.6
%$36.6
8.9
%$39.5
7.9
%$41.8
5.8
%
Bank
$10.7
-30.9
%$10.7
0.2
%$11.0
2.7
%$10.7
-2.0
%$10.3
-4.2
%$10.5
1.9
%$10.6
0.9
%
Oth
er
Tax
$1.2
-66.7
%$1.8
42.9
%$1.9
9.6
%$2.0
4.5
%$2.2
8.7
%$2.5
13.6
%$2.8
12.0
%
Tota
l T
ax R
evenue
$1,3
72.4
2.8
%$1,4
64.3
6.7
%$1,5
17.0
3.6
%$1,5
73.5
3.7
%$1,6
33.1
3.8
%$1,6
80.6
2.9
%$1,7
21.7
2.4
%
Busin
ess L
icenses
$3.0
3.4
%$2.8
-8.0
%$1.1
-61.4
%$1.1
0.2
%$0.5
-54.8
%$0.5
2.0
%$0.5
2.0
%
Fees
$20.9
2.1
%$21.4
2.2
%$20.6
-3.4
%$22.1
7.0
%$22.1
0.1
%$22.8
3.2
%$23.5
3.1
%
Serv
ices
$2.3
105.8
%$2.5
8.3
%$1.3
-47.3
%$1.5
12.5
%$3.3
120.9
%$3.8
15.2
%$4.2
10.5
%
Fin
es
$7.4
28.7
%$4.7
-35.9
%$3.6
-24.2
%$3.5
-3.1
%$4.0
15.5
%$3.8
-5.0
%$3.9
2.6
%
Inte
rest
$0.4
32.8
%$0.6
26.3
%$0.2
-59.2
%$0.3
40.4
%$0.6
89.1
%$0.9
55.0
%$1.3
34.4
%
Lott
ery
$22.3
4.2
%$22.9
2.7
%$22.6
-1.6
%$22.8
0.8
%$23.6
3.7
%$23.7
0.4
%$23.9
0.8
%
All O
ther*
****
$0.9
19.7
%$1.7
86.8
%$1.3
-24.0
%$1.0
-20.4
%$1.7
68.2
%$1.5
-11.8
%$1.6
6.7
%
Tota
l O
ther
Revenue
$57.3
8.6
%$56.6
-1.3
%$50.7
-10.4
%$52.2
3.0
%$55.8
6.9
%$57.0
2.2
%$58.9
3.2
%
TO
TA
L G
EN
ER
AL
FU
ND
$1,4
29.7
3.0
%$1,5
20.9
6.4
%$1,5
67.6
3.1
%$1,6
25.7
3.7
%$1,6
88.9
3.9
%$1,7
37.6
2.9
%$1,7
80.6
2.5
%
No
tes:
* In
clu
des T
ele
co
mm
un
icati
on
s T
ax;
inclu
des $
3.7
6M
tra
nsfe
r in
FY
08 t
o t
he T
-Fu
nd
fo
r p
rio
r y
ears
Jet
Fu
el ta
x p
rocessin
g e
rro
r.
** In
clu
des C
igare
tte T
ax, T
ob
acco
Pro
du
cts
Tax a
nd
Flo
or
Sto
ck T
ax r
ev
en
ues.
***
Refl
ects
clo
su
re o
f V
erm
on
t Y
an
kee in
Decem
ber
of
2014. T
axed
per
Act
143 o
f 2012 e
ffecti
ve in
FY
2013. S
tate
d E
lectr
ic E
nerg
y T
ax r
ev
en
ues e
xclu
de a
pp
rop
riati
on
s t
o t
he C
lean
En
erg
y D
ev
elo
pm
en
t F
un
d a
nd
Ed
ucati
on
Fu
nd
.
****
Exclu
des t
ran
sfe
r to
th
e H
igh
er
Ed
ucati
on
Tru
st
Fu
nd
of
$2.4
M in
FY
05, $5.2
M in
FY
06 a
nd
$11.0
millio
n in
FY
11.
****
Exclu
des $
5.0
millio
n p
ay
men
t fr
om
En
terg
y in
fis
cal y
ear
2015 t
hat
is e
arm
ark
ed
fo
r a S
pecia
l F
un
d.
Co
nsen
su
s J
FO
an
d A
dm
inis
trati
on
Fo
recast
- Jan
uary
2016
TA
BL
E 1
A -
ST
AT
E O
F V
ER
MO
NT
LE
GIS
LA
TIV
E J
OIN
T F
ISC
AL
OF
FIC
E/A
DM
INIS
TR
AT
ION
SO
UR
CE
GE
NE
RA
L F
UN
D R
EV
EN
UE
FO
RE
CA
ST
UP
DA
TE
26
CU
RR
EN
T L
AW
BA
SIS
inclu
din
g a
ll E
ducation F
und
FY
2012
%F
Y 2
013
%F
Y 2
014
%F
Y 2
015
%F
Y 2
016
%F
Y 2
017
%F
Y 2
018
%
allo
cations a
nd o
ther
out-
transfe
rs(A
ctu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
RE
VE
NU
E S
OU
RC
E
Pers
onal In
com
e$597.0
7.9
%$660.6
10.7
%$671.1
1.6
%$705.9
5.2
%$760.8
7.8
%$793.7
4.3
%$817.0
2.9
%
Sale
s and U
se*
$227.9
5.0
%$231.2
1.4
%$229.9
-0.6
%$237.0
3.1
%$245.9
3.8
%$254.9
3.6
%$262.5
3.0
%
Corp
ora
te$85.9
-4.2
%$95.0
10.5
%$94.8
-0.1
%$121.9
28.5
%$104.2
-14.5
%$92.6
-11.1
%$89.8
-3.0
%
Meals
and R
oom
s$126.9
3.5
%$134.8
6.2
%$142.7
5.9
%$150.8
5.7
%$155.6
3.2
%$161.3
3.7
%$166.8
3.4
%
Cig
are
tte a
nd T
obacc
o *
*$0.0
NM
$0.0
NM
$0.0
NM
$0.0
NM
$0.0
NM
$0.0
NM
$0.0
NM
Liq
uor
$16.4
7.0
%$17.0
3.4
%$17.7
4.0
%$18.2
2.9
%$18.3
0.7
%$19.0
3.8
%$19.6
3.2
%
Insu
rance
$56.3
2.5
%$55.0
-2.3
%$57.1
3.7
%$55.3
-3.1
%$57.0
3.1
%$57.7
1.2
%$58.4
1.2
%
Tele
phone
$9.6
-15.3
%$9.4
-2.6
%$9.1
-2.9
%$7.7
-14.9
%$3.1
-60.0
%$6.3
103.2
%$6.1
-3.2
%
Bevera
ge
$6.0
3.3
%$6.2
3.3
%$6.4
3.6
%$6.7
4.2
%$6.8
2.1
%$7.0
2.9
%$7.2
2.9
%
Est
ate
****
$13.3
-46.4
%$15.4
15.4
%$35.5
131.0
%$9.9
-72.2
%$20.5
107.3
%$22.1
7.8
%$23.6
6.8
%
Pro
pert
y$7.9
-6.1
%$9.2
16.5
%$10.0
9.3
%$10.9
8.7
%$11.8
8.9
%$12.8
7.9
%$13.5
5.8
%
Bank
$10.7
-30.9
%$10.7
0.2
%$11.0
2.7
%$10.7
-2.0
%$10.3
-4.2
%$10.5
1.9
%$10.6
0.9
%
Oth
er
Tax
$1.2
-66.7
%$1.8
42.9
%$1.9
9.6
%$2.0
4.5
%$2.2
8.7
%$2.5
13.6
%$2.8
12.0
%
Tota
l Tax
Reve
nue
$1,1
62.1
3.3
%$1,2
55.0
8.0
%$1,3
00.3
3.6
%$1,3
46.4
3.5
%$1,3
96.5
3.7
%$1,4
40.3
3.1
%$1,4
77.9
2.6
%
Busi
ness
Lic
ense
s$3.0
3.4
%$2.8
-8.0
%$1.1
-61.4
%$1.1
0.2
%$0.5
-54.8
%$0.5
2.0
%$0.5
2.0
%
Fees
$20.9
2.1
%$21.4
2.2
%$20.6
-3.4
%$22.1
7.0
%$22.1
0.1
%$22.8
3.2
%$23.5
3.1
%
Serv
ices
$2.3
105.8
%$2.5
8.3
%$1.3
-47.3
%$1.5
12.5
%$3.3
120.9
%$3.8
15.2
%$4.2
10.5
%
Fin
es
$7.4
28.7
%$4.7
-35.9
%$3.6
-24.2
%$3.5
-3.1
%$4.0
15.5
%$3.8
-5.0
%$3.9
2.6
%
Inte
rest
$0.4
36.3
%$0.5
20.5
%$0.2
-66.6
%$0.2
51.9
%$0.5
109.8
%$0.8
60.0
%$1.1
37.5
%
All
Oth
er*
****
$0.9
19.7
%$1.7
86.8
%$1.3
-24.0
%$1.0
-20.4
%$1.7
68.2
%$1.5
-11.8
%$1.6
6.7
%
Tota
l Oth
er
Reve
nue
$34.9
11.6
%$33.5
-3.9
%$28.0
-16.4
%$29.4
4.7
%$32.1
9.3
%$33.2
3.5
%$34.8
4.8
%
TO
TA
L G
EN
ER
AL
FU
ND
$1,1
97.0
3.5
%$1,2
88.6
7.7
%$1,3
28.4
3.1
%$1,3
75.8
3.6
%$1,4
28.6
3.8
%$1,4
73.5
3.1
%$1,5
12.8
2.7
%
Note
s:
* In
clu
des $
2.5
M tra
nsfe
r to
the T
-Fund in
FY
08 f
or
prior
years
Jet F
uel t
ax
pro
cessin
g e
rrors
.
** Inclu
des C
igare
tte T
ax,
Tobacco P
roducts
Tax
and F
loor
Sto
ck
Tax
reve
nues.
***
Reflects
clo
sure
of
Verm
ont Y
anke
e in
Decem
ber
of
2014. T
axe
d p
er
Act 143 o
f 2012 e
ffectiv
e in
FY
2013. S
tate
d E
lectr
ic E
nerg
y T
ax
reve
nues e
xclu
de a
ppro
priatio
ns to the C
lean E
nerg
y D
eve
lopm
ent F
und a
nd E
ducatio
n F
und.
****
Exc
ludes tra
nsfe
r to
the H
igher
Educatio
n T
rust F
und o
f $2.4
M in
FY
05, $5.2
M in
FY
06 a
nd $
11.0
mill
ion in
FY
11.
****
Exc
ludes $
5.0
mill
ion p
aym
ent fr
om
Ente
rgy
in f
iscal y
ear
2015 that is
earm
ark
ed f
or
a S
pecia
l Fund.
LE
GIS
LA
TIV
E J
OIN
T F
ISC
AL
OF
FIC
E/A
DM
INIS
TR
AT
ION
TA
BL
E 1
- S
TA
TE
OF
VE
RM
ON
T
AV
AIL
AB
LE
GE
NE
RA
L F
UN
D R
EV
EN
UE
FO
RE
CA
ST
UP
DA
TE
Co
nsen
su
s J
FO
an
d A
dm
inis
trati
on
Fo
recast
- Jan
uary
2016
27
SO
UR
CE
T-F
UN
D
revenues a
re p
rior
to a
ll E
-Fund a
llocations
and o
ther
out-
transfe
rs. U
sed for
FY
2012
%F
Y 2
013
%F
Y 2
014
%F
Y 2
015
%F
Y 2
016
%F
Y 2
017
%F
Y 2
018
%
analy
tic a
nd c
om
para
tive p
urp
oses o
nly
.(A
ctu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
RE
VE
NU
E S
OU
RC
E
Gasoline
$59.3
-2.2
%$59.9
1.1
%$76.5
27.6
%$77.6
1.5
%$78.3
0.9
%$78.4
0.1
%$78.3
-0.1
%
Die
sel
$16.0
3.9
%$15.6
-2.2
%$17.2
9.7
%$19.1
11.5
%$19.5
1.8
%$19.9
2.1
%$20.2
1.5
%
Purc
hase a
nd U
se*
$81.9
6.3
%$83.6
2.0
%$91.8
9.9
%$97.3
5.9
%$102.3
5.2
%$106.8
4.4
%$110.7
3.7
%
Moto
r V
ehic
le F
ees
$73.5
1.7
%$77.9
5.9
%$79.0
1.5
%$80.1
1.4
%$81.8
2.1
%$82.4
0.7
%$83.0
0.7
%
Oth
er
Revenue**
$18.3
2.2
%$19.1
4.2
%$19.5
2.3
%$19.7
0.8
%$18.9
-3.8
%$19.4
2.6
%$19.7
1.5
%
TO
TA
L T
RA
NS
. F
UN
D$249.0
2.3
%$256.0
2.8
%$284.0
10.9
%$293.8
3.5
%$300.8
2.4
%$306.9
2.0
%$311.9
1.6
%
CU
RR
EN
T L
AW
BA
SIS
inclu
din
g a
ll E
ducation F
und
FY
2012
%F
Y 2
013
%F
Y 2
014
%F
Y 2
015
%F
Y 2
016
%F
Y 2
017
%F
Y 2
018
%
allocations a
nd o
ther
out-
transfe
rs(A
ctu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
RE
VE
NU
E S
OU
RC
E
Gasoline
$59.3
-2.2
%$59.9
1.1
%$76.5
27.6
%$77.6
1.5
%$78.3
0.9
%$78.4
0.1
%$78.3
-0.1
%
Die
sel
$16.0
3.9
%$15.6
-2.2
%$17.2
9.7
%$19.1
11.5
%$19.5
1.8
%$19.9
2.1
%$20.2
1.5
%
Purc
hase a
nd U
se*
$59.6
16.0
%$55.7
-6.5
%$61.2
9.9
%$64.8
5.9
%$68.2
5.2
%$71.2
4.4
%$73.8
3.7
%
Moto
r V
ehic
le F
ees
$73.5
1.7
%$77.9
5.9
%$79.0
1.5
%$80.1
1.4
%$81.8
2.1
%$82.4
0.7
%$83.0
0.7
%
Oth
er
Revenue**
$18.3
2.2
%$19.1
4.2
%$19.5
2.3
%$19.7
0.8
%$18.9
-3.8
%$19.4
2.6
%$19.7
1.5
%
TO
TA
L T
RA
NS
. F
UN
D$226.6
88
4.2
%$228.1
95
0.7
%$253.3
83
11.0
%$261.4
3.2
%$266.7
2.0
%$271.3
1.7
%$275.0
1.4
%
OT
HE
R
TIB
Gasoline
$20.9
26.6
%$21.2
1.4
%$19.2
-9.5
%$18.2
-5.2
%$13.0
-28.3
%$12.6
-3.7
%$12.5
-0.1
%
TIB
Die
sel and O
ther*
**$1.9
-1.7
%$1.8
-8.6
%$1.8
4.5
%$2.1
11.4
%$2.1
1.7
%$2.1
2.1
%$2.2
1.5
%
Tota
l T
IB$22.8
23.6
%$23.0
0.6
%$21.0
-8.4
%$20.2
-3.8
%$15.1
-25.3
%$14.7
-2.9
%$14.7
0.1
%
Note
s:
* A
s o
f F
Y04, in
clu
des M
oto
r V
ehic
le R
enta
l ta
x re
venue
** B
egin
nin
g in F
Y07, in
clu
des S
tabili
zation R
eserv
e inte
rest; F
Y08 d
ata
inclu
des $
3.7
6M
tra
nsfe
r fr
om
G-F
und f
or
prior
Jet F
uel ta
x pro
cessin
g e
rrors
and inclu
sio
n o
f th
is tax
in s
ubsequent ye
ars
***
Inclu
des T
IB F
und inte
rest in
com
e o
f le
ss than $
15,0
00
TA
BL
E 2
A -
ST
AT
E O
F V
ER
MO
NT
LE
GIS
LA
TIV
E J
OIN
T F
ISC
AL
OF
FIC
E/A
DM
INIS
TR
AT
ION
SO
UR
CE
TR
AN
SP
OR
TA
TIO
N F
UN
D R
EV
EN
UE
FO
RE
CA
ST
UP
DA
TE
Co
nsen
su
s J
FO
an
d A
dm
inis
trati
on
Fo
recast
- Jan
uary
2016
TA
BL
E 2
- S
TA
TE
OF
VE
RM
ON
T
LE
GIS
LA
TIV
E J
OIN
T F
ISC
AL
OF
FIC
E/A
DM
INIS
TR
AT
ION
AV
AIL
AB
LE
TR
AN
SP
OR
TA
TIO
N F
UN
D R
EV
EN
UE
FO
RE
CA
ST
UP
DA
TE
Co
nsen
su
s J
FO
an
d A
dm
inis
trati
on
Fo
recast
- Jan
uary
2016
28
CU
RR
EN
T L
AW
BA
SIS
Sourc
e G
enera
l and T
ransport
ation
Fund taxes a
llocate
d to o
r associa
ted
FY
2012
%F
Y 2
013
%F
Y 2
014
%F
Y 2
015
%F
Y 2
016
%F
Y 2
017
%F
Y 2
018
%
with the E
ducation F
und o
nly
.(A
ctu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Actu
al)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
(Fo
reca
st)
Change
GE
NE
RA
L F
UN
D
Sale
s &
Use**
$113.9
5.0
%$115.6
1.4
%$123.8
7.1
%$127.6
3.1
%$132.4
3.8
%$137.2
3.6
%$141.4
3.0
%
Inte
rest
$0.0
NM
$0.1
NM
$0.1
NM
$0.1
NM
$0.1
NM
$0.1
NM
$0.2
NM
Lott
ery
$22.3
4.2
%$22.9
2.7
%$22.6
-1.6
%$22.8
0.8
%$23.6
3.7
%$23.7
0.4
%$23.9
0.8
%
TR
AN
SP
OR
TA
TIO
N F
UN
D
Purc
hase a
nd U
se**
*$27.3
6.3
%$27.9
2.0
%$30.6
9.9
%$32.4
5.9
%$34.1
5.2
%$35.6
4.4
%$36.9
3.7
%
TO
TA
L
$163.6
5.1
%$166.5
1.7
%$177.0
6.3
%$182.9
3.3
%$190.2
4.0
%$196.7
3.4
%$202.3
2.9
%
No
tes:
FY
1998 r
ev
en
ues r
ep
resen
t p
art
ial y
ear
allo
cati
on
s p
rio
r to
Act
60 T
ech
nic
al C
orr
ecti
on
s
** In
clu
des T
ele
co
mm
un
icati
on
s T
ax;
Inclu
des $
1.2
5M
tra
nsfe
r to
T-F
un
d in
FY
08 f
or
pri
or
Jet
Fu
el T
ax p
rocessin
g e
rro
rs
***
Inclu
des M
oto
r V
eh
icle
Ren
tal re
ven
ues, re
sta
ted
TA
BL
E 1
A -
ST
AT
E O
F V
ER
MO
NT
LE
GIS
LA
TIV
E J
OIN
T F
ISC
AL
OF
FIC
E/A
DM
INIS
TR
AT
ION
AV
AIL
AB
LE
ED
UC
AT
ION
FU
ND
* R
EV
EN
UE
FO
RE
CA
ST
UP
DA
TE
Co
nsen
su
s J
FO
an
d A
dm
inis
trati
on
Fo
recast
- Jan
uary
2016