McAuliffe offers revised state revenue, budget estimate

Governor Terry McAuliffe today informed the money committees of the Virginia General Assembly that he recommends retaining the revenue forecast presented in the biennial budget he introduced in December. The Governor’s recommendation was the result of extensive consultation with the Secretary of Finance, the Virginia Department of Taxation and the Department of Planning and Budget:

“When I addressed the General Assembly money committees in December, I presented a conservative budget plan that included a revenue estimate $750 million lower than the recommendation originally presented to the Governor’s Advisory Council on Revenue Estimates. Now, 7 months into the fiscal year, actual collections indicate that Virginia is on-track to meet that estimate and support a prudent, balanced budget that invests in key priorities for economic growth like education and workforce development.

“Accordingly, I have instructed Secretary of Finance Ric Brown to advise the General Assembly money committees that our mid-session revenue review recommends maintaining the current revenue estimate. While we believe lowering the estimate is an unnecessary step that will impair investments in core programs, we also recommend against spending more than the current budget and raising the possibility of a revenue shortfall down the road.

“As Virginia continues to grow past the damage of the recession and federal sequestration cuts, we have a responsibility to strike a balance between fiscal prudence and smart investments in a new Virginia economy. After an extensive review of our current economic conditions, we believe the current budget does just that and recommend against any significant adjustments to the revenue forecast.”

It is customary for the governor and the Secretary of Finance to provide the General Assembly with the results of a mid-session revenue review and make a recommendation with respect to the Commonwealth’s revenue forecast before appropriators introduce their amendments to the Governor’s budget.

In making this announcement the governor is recommending changes to individual sources of revenue.  These adjustments offset one another creating no net change in total revenue.   The governor’s adjustments were intended to better align the forecast with actual revenue collection trends on a source-by-source basis.  The aggregate revenue forecast, however, remains unchanged.