©2008 Public Assets Institute State Taxes and Budgets: Policies for Prosperity October 2, 2008 Paul...

©2008 Public Assets Institute

State Taxes and Budgets: Policies for Prosperity

October 2, 2008

Paul A. CilloJack Hoffman

Public Assets Institute www.publicassets.org


Public Assets Institute

Mission: To conduct research, perform fiscal analysis, disseminate information, and develop policies that apply the powers of government to improving the well being of ordinary citizens, especially the most vulnerable.


FY-08 State Expenditures - $4.15 billion Source: JFO

K-1235.0%

Medicaid-SCHIP-Rx-Catamount

27.6%

Transportation2.9%

Corrections2.9%

Higher Ed2.1%

Natural Resources2.0%

All other27.5%


FY08 State Budget by Funding Source - $4.15 billion Includes Federal Funds and Statewide Education Tax

Source: JFO

Federal funds31.5%

General fund28.3%

Education fund23.6%

Special funds5.6%

Transportation fund5.6%

State health care resources fund3.8%

Other1.6%


FY-08 General Fund Revenue Sources – $1.170 billion(July 2007 Projection)

Source: JFO

Personal Income51%

Sales & Use20%

Rooms & Meals10%

Corporate Income5%

Property Transfer

Fees1%

Estate2%

Insurance5%

Other5%


2007Vermont Tax Rate SchedulesMarried Filing Jointly Single IndividualsTaxable Income Taxable IncomeoverBut not over Pay+ % on Excessof amt over overBut not over Pay+ % on Excessof amt over053,150 0.003.60% 0 031,850 0.003.60%053,150128,5001,913.007.20%53,15031,85077,1001,147.007.20%31,850128,500195,8507,339.008.50%128,50077,100160,8504,405.008.50%77,100195,850349,70013,063.009.00%195,850160,850349,70011,523.009.00%160,850349,700- 26,910.009.50%349,700349,700- 28,520.009.50%349,700Heads of Household Married Filing SeparatelyTaxable Income Taxable IncomeoverBut not over Pay+ % on Excessof amt over overBut not over Pay+ % on Excessof amt over042,650 0.003.60% 0 026,575 0.003.60%042,650110,1001,535.007.20%42,65026,57564,250957.007.20%26,575110,100178,3506,392.008.50%110,10064,25097,9253,669.008.50%64,250178,350349,70012,193.009.00%178,35097,925174,8506,532.009.00%97,925349,700- 27,615.009.50%349,700174,850- 13,455.009.50%174,850

2007 Vermont Income Tax


Distribution of Vermonters' Tax Returns, Income, and VT Income Tax (2006)

Data Source: VT Tax Department

0%

10%

20%

30%

40%

50%

60%

70%

$0-$49,999 $50,000-$99,999

$100,000-$299,999

$300,000-$999,999

$1,000,000 +

ReturnsAGIVT tax


FY-08 Education Fund Revenue Sources - $1.24 billion (Sept. 2007 Projection)

Source: JFO

Homestead Education25%

Non-homestead Education38%

Sales and Use9%

Purchase and Use2%

General Fund Transfer23%

Lottery2%

Other1%


FY-08 Transportation Fund Revenue Sources - $229.4 million (July 2007 Projection)

Source: JFO

Gasoline28%

Diesel8%

Purchase and Use 24%

Motor Vehicle Fees31%

Other9%


GSP, VTrs AGI, GF Base, VTrs School TaxesCompound Average Annual Growth -- Vermont (1996-2006)

(not inflation adjusted)Data Sources: VT Tax Dept., JFO, Economy.com

1

1.2

1.4

1.6

1.8

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Index (1996=1)

Gross State Product Vermonters' AGI GF Base Appropriations Vermonters' School Taxes


General Fund FY2009

$1,160

$1,180

$1,200

$1,220

$1,240

$1,260

$1,280

FY2008 As Passed Governor's ProposedBudget FY2009

FY 2009 As Passed FY2009 After AugustRescisions

5-year AverageAnnual Increase (6 %)

Millions


FY2010 ProjectedBudget Gap

Revenue Millions

Current forecast $1,194

Expenditures

3% growth over FY2009 ($1,236)

Gap ($42)


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

3% grow th



Revenue Millions


Expenditures


Reg. Medicaid increase ($10)

Gap ($52)


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

Medicaid incr.

3% grow th



Revenue Millions


Expenditures



Medicaid deficit ($38)

Gap ($90)


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

Medicaid deficit

Medicaid incr.

3% grow th



Revenue Millions


Expenditures




LIHEAP ($5)

Gap ($95)


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

LIHEAP

Medicaid deficit

Medicaid incr.

3% grow th



Revenue Millions


Expenditures




LIHEAP ($5)

Teachers’ retirement ($2-10)

Gap ($97-107)


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

Teachers

LIHEAP

Medicaid deficit

Medicaid incr.

3% grow th


Vermont Gasoline Tax as % of Per-Gallon

0%

5%

10%

15%

20%

25%

$1.00 $1.25 $1.50 $1.75 $2.00 $2.25 $2.50 $2.75 $3.00 $3.25 $3.50 $3.75 $4.00 $4.25 $4.50 $4.75 $5.00


Changes in Costs for 2008

($100,000,000)

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

$700,000,000

Fossil fuel energy Health care General & Transportation Fund taxes

©2008 Public Assets Institute State Taxes and Budgets: Policies for Prosperity October 2, 2008 Paul...

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