Virginia Gov. Glenn Youngkin announced in a news release today that Virginia ended the fiscal year 2022 with a $1.94 billion general fund revenue surplus.
“While I am pleased that our additional revenue can be reinvested in Virginia, the Commonwealth’s general fund revenue surplus confirms that Virginians have been overtaxed for way too long,” said Youngkin. “As inflation hits another 40-year high, I’m proud that our budget provides almost $4 billion in tax relief to Virginians, the largest tax relief in the Commonwealth’s history. We have a lot of work left to do to recover from the pandemic.”
Youngkin points to promising economic growth with companies including Boeing, Raytheon and LEGO moving their headquarters to Virginia. Youngkin said that 2022 was an “extraordinary year” for revenues and finished strong.
“However, there are a number of critical economic issues that we will continue to watch very closely as we put our plan together for the future,” said Stephen Cummings, Secretary of Finance. “We are encouraged by the continuing strength of payroll withholding and retail sales taxes, which increased by 9.5 percent, indicating that Virginia’s underlying economic foundation is strong.”
According to the news release:
- Virginia’s strong labor market has produced 79,818 jobs since January, driving growth in payroll withholding.
- There were 124,878 more Virginians employed in May 2022 than there were in May 2021, an increase of 3.5 percent year-over-year.
- Virginia has yet to recover more than 133,000 jobs that were lost during the pandemic (now at 96.9 percent of pre-pandemic levels) while our key competitor states have all exceeded pre-pandemic employment levels.
- While the Commonwealth underperformed the nation in jobs recovered since the pandemic, ranking 47th overall, momentum is building
- Virginia is now ranked 15th among the states in employment growth for the first four months of 2022
An analysis of fiscal year 2022 revenues (based on preliminary data):
- Fiscal year 2022 ended with a $1.94 billion general fund revenue surplus
- General fund revenues, excluding transfers, rose 16.3 percent for the year compared to fiscal year 2021, exceeding the forecast of 8.5 percent growth.
- Payroll withholding and sales tax collections, 69 percent of total revenues, finished $193.5 million or 1.0 percent ahead of the forecast.
- Payroll withholding grew of 9.5 percent, exceeding the forecast of 9 percent growth.
- Sales tax collections increased 9.4 percent as compared to the annual forecast of 6.5 percent.
- Non withholding income tax collections finished the year ahead of expectations, up 30.5 percent. This was mainly due to a 40.9 percent increase in final tax payments to the Department of Taxation
- Individual income tax refunds were a positive to the forecast as the average check size decreased. Tax refunds were $280.2 million below expectations, a positive to the bottom line.
- Corporate income tax collections increased 30.5 percent for the year, behind the annual forecast of 32.6 percent.
A complete accounting of all final revenue sources will be available after final year-end close and will be released on August 19 when the governor speaks at the joint money committee meeting.
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Crystal Graham
