March revenue collections for the Commonwealth of Virginia exceeded forecasts by 22.3 percent. General fund revenues were approximately $870 million higher year-to-date than the mid-session revised forecast issued in January.
Total revenue collections have risen 14.5 percent through March, well ahead of the revised annual forecast of 9.2 percent growth.
“This revenue report shows strong signs that Virginia is growing. I am encouraged by the strength we’re seeing in our economy when you look at steady job growth, wages rising and median family income increasing in the Commonwealth,” Gov. Glenn Youngkin said. “With this report confirming and exceeding our mid-session general fund forecast, we continue to see evidence that there’s plenty of money in the system to provide critical tax cuts and needed relief for Virginians struggling with rising gas prices and record-high inflation on groceries and the products they need every day.”
He had to inject the political talk there, so it should be pointed out that the governor himself has admitted that his plan for suspending the gas tax for three months isn’t guaranteed to actually trickle down to consumers, and that Democrats in the General Assembly have countered his proposal with a direct rebate that would.
“The March revenue report reflects an improving economic environment with an uptick in employment growth and strong wage growth,” said Secretary of Finance Stephen Cummings. “But as always, the fourth quarter collections will be highly dependent on individual estimated and final nonwithholding payments. I am closely watching nonwithholding collections given their connection to a volatile stock market. However, I am confident that the revised revenue estimate provides sufficient cushion to meet the forecast.”
Total general fund revenues rose by 22.3 percent in March. Continued strength in payroll withholding and retail sales tax as well as strong growth in the leading edge of individual final payments due May 2nd drove the growth. Also contributing to the month were fewer refunds issued in March due to the earlier opening of tax processing, shifting some refunds into February versus March. On a fiscal year-to-date basis, total revenue collections rose 14.5 percent through March, ahead of the revised annual forecast of 9.2 percent growth.
Based upon the strong March revenue results, the mid-session general fund forecast released on Feb. 18, is well supported. The mid-session revised forecast reflected the fact that general fund revenues had exceeded the fiscal year-to-date forecast by approximately $1.45 billion.
The full March 2022 revenue report is available here.
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Chris Graham
