State may post revenue surplus

Edited by Chris Graham
[email protected]
 

Gov. Bob McDonnell announced today that May revenue collections significantly outperformed projections. General fund revenue collections declined by only 0.2 percent, far outpacing the budget forecast of a 2.3 percent decline. With the new numbers in, and on the heels of the first back-to-back months of increases in general fund revenue collections since March-April 2008, the Commonwealth is now on pace to post a revenue surplus at the conclusion of the fiscal year on June 30.

To ensure a surplus the Commonwealth needs to collect $1.37 billion in general fund revenues in June. The Commonwealth collected $1.5 billion in June 2009, in a slightly softer economy. In addition to beating May’s forecast for general fund revenue collections, Virginia also recorded the first back-to-back months of positive growth in the collection of sales and use taxes since November-December 2007. Sales and use tax collections increased by 6.5 percent in May, after rising by 7.3 percent in April.

“To beat revenue projections by two percentage points is a positive sign for the Commonwealth’s economic recovery,” McDonnell said. “I am particularly heartened by the back-to-back months of increases in collections of sales and use taxes. This is a small, yet very important, indicator that activity is returning to our economy, and Virginians are regaining some confidence in both the general fiscal outlook for our state and nation as well as the outlook for their own specific situations.”

The May revenue numbers are available at this link:

http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2009-2010/2010ReportsList.cfm