Commonwealth posts revenue growth in August

Gov. Bob McDonnell announced today that August revenue collections increased by 7.8 percent over the prior year. This is the 17th month out of the last 18 in which state revenue collections exceeded the previous year’s amount.

Although August is not a significant month for revenue collections, the revenue increase was primarily driven by a 13.3 percent growth in individual income tax withholding  and a 24.6 percent increase in non-withholding receipts (individual final payments based on 2010 tax liabilities). On the other hand, receipts for sales tax and corporate income tax fell. August features the annual sales tax holiday for school supplies. On a year-to-date basis, total revenue collections have risen 8.8 percent, ahead of the revised annual forecast of 3.7 percent growth. Adjusted for the accelerated sales tax program, state revenues have grown 6.7 percent, ahead of the economic base forecast of 3.5 percent growth.

“Following the closure of the fiscal year with our second straight surplus, revenue indicators continue to demonstrate that Virginia’s economy continues to gradually show some signs of improvement,” Governor McDonnell said. “While 7.8 percent revenue growth this month is great news, August is typically not a significant month for revenue collections, so we will look forward to the closure of the first quarter of fiscal year 2012 in September for a more comprehensive view of the Commonwealth’s overall economic picture. The fact is, while Virginia’s economy continues to recover, we still have not fully turned the corner from the deep and long-lasting downturn that has impacted every Virginian.  More than 250,000 Virginians are still out of a job, and that is tragic and unacceptable. There are tough days still ahead, and we know that the road back to economic prosperity for all our citizens will be a long and winding one. Virginia is not immune to national trends. Clearly, recent negative news and disappointing projections about the trajectory of the American economy will have an impact here in the Commonwealth. With this in mind, we must redouble our efforts to work together to ensure Virginians can find the good-paying jobs they deserve and that we get our economy back on track. Our administration is committed to implementing aggressive policies that encourage economic growth, help private-sector companies add jobs, reduce government spending, and nurture a strong and growing economy in the years ahead.”

The August revenue numbers are available at this link:

www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2011-2012/2012ReportsList.cfm.

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