State revenues up 7.6 percent in March

Gov. Bob McDonnell announced today that March general fund revenue collections rose 7.6 percent. The year-over-year increase was driven in large part by growth in sales and corporate income tax receipts. March is typically not a significant month for revenue collections.

On a year-to-date basis, total revenue collections have risen 5.3 percent, ahead of the revised annual forecast of 4.6 percent growth. Adjusted for the accelerated sales tax program, state revenues have grown 4.9 percent, close to the economic base forecast of 4.7 percent growth.

The March revenue gains were reflected across nearly all major revenue sources except individual withholding, which declined by 5 percent. March had one less deposit day than March 2011, and one less Wednesday, which is usually the largest payroll withholding day of the week. Individual non-withholding grew by 5.9 percent. Sales tax receipts increased by 11.1 percent in the month.

On a year-to-date basis, sales tax collections have risen 5.7 percent, compared to a projected annual growth of 1.8 percent. Compared to March 2011, corporate income tax receipts have grown 16.4 percent.  With March being a relatively non-significant month for tax collections, the April and May reports will have a much larger impact on the Commonwealth’s ultimate financial standing for the fiscal year 2012.

Final individual income payments for tax year 2011 and estimated tax payments for the current tax year are due on May 1.

“This is a positive revenue report from a less significant month for state revenue collections,” McDonnell said. “Sales tax receipts are up, and hopefully that reflects some improvement in overall consumer confidence, an important economic indicator. Also, corporate tax receipts grew in March, and that correlates with the improving jobs climate in the state. Unemployment is now at 5.7 percent, the lowest rate in over three years. More Virginians are working today, and this is a bipartisan accomplishment. It is good news, but there is much work left to be done before all Virginians will have the good work they need and deserve.”