February’s monthly close provided additional data on retail sales tax collections for the holiday shopping season as well as the second component of the final calendar year individual income tax estimated payment. The revenue adjustment is in addition to the $338 million revenue increase the Governor announced to the General Assembly earlier this month.
“While we still have a responsibility to be cautious stewards of taxpayer dollars, our improving revenue picture is great news for our Commonwealth,” said Governor McAuliffe. “These additional revenues will allow us to fund a pay raise for Virginia public school teachers that is equal to what other state employees receive and to restore investments in key priorities that have been cut. Finally, I hope my colleagues in the General Assembly will take the prudent step of reserving a portion of these new revenues for the Rainy Day Fund, which has been essential to our ability to weather our recent budget difficulties. Our job creation and economic development efforts are clearly bearing fruit and creating new budget opportunities, but we still have a lot of work to do to grow and diversify a new Virginia economy.”
Additional Mid-Session Revenue Adjustments
- FY15 Total revenues revised upwards by an additional $60.0 million.
- FY16 Total revenues revised upwards by an additional $76.0 million.
- Over the biennium, there will be an additional increase of $136.0 million.
Total Mid-session Forecast
Combined with the revisions from the February 6th preliminary mid-session meeting with the money committee chairmen, the revenue forecast is being revised upward by a biennial total of $474.0 million.
- FY15 Total revenues revised upwards by $245.0million.
- FY16 Total revenues revised upwards by $229.0 million.
However, since most of the revisions are in sources that are certified tax revenues sources that fund the revenue stabilization fund, the Governor and General Assembly must take into account how these total increases will affect the deposit to the fund in the next biennium. Preliminary calculations for the revenue stabilization fund indicate that approximately $300 million will be required to be deposited in fiscal year 2017. The formula does not require a deposit for fiscal year 2018 based on the revised mid-session forecast.
Governor McAuliffe reported these additional revenues at a meeting with the money committee chairmen this morning.
In addition to providing additional resources, the Governor made several recommendations on allocating these resources. Among his requests were:
- Reserving some part of the increase for the required deposit to the Revenue Stabilization Fund in fiscal year 2017.
- Providing a larger percentage pay increase to public school teachers so that they are treated commensurate with the proposed percentage pay increase for other categories of state and local employees.
- Restoring some, if not all, of the reductions proposed by both the House and the Senate to the Governor’s Economic Development Opportunity Fund.
- Restoring the original requests of $500,000 to capitalize the Tourism Growth Incentive Fund.
- Allocating at least a full $1.0 million for rapid re-housing assistance efforts.
- Assuring that sufficient monies from the various liquor fee increases remain available for the Department of Alcoholic Beverage Control to begin its business modernization efforts.
The Governor will meet with the Budget Conferees on Tuesday morning for further discussions on the budget process.