Virginia’s general fund revenues for October 2022 exceed expectations

The general fund revenues for October 2022 in Virginia exceeded budget forecasts with a 10.3 percent increase over last year.

General fund revenues increased 3 percent from September 2022, and included issuance of an additional $88 million in taxpayer rebates.

“With the impacts of planned policy actions, including the historic tax rebates of nearly $900 million recently delivered to Virginians, October revenue collection increased more than 10 percent compared to a year ago,” Gov. Glenn Youngkin said in a press release. “Recent economic data remains mixed and we’re closely monitoring consumer indicators like sales and use revenues whose upward trends are unlikely to continue long-term. The impact of sustained inflation and misguided actions out of Washington have undermined consumer confidence and employment growth nationally.”

The press release stated that payroll withholding, sales and use tax revenues drove the year-over-year growth, which reflects the impact of inflation and its significant impact on Virginian families. Payroll withholding increased by 4.2 percent, which was influenced by a strong labor market and wage growth as 123,000 more Virginians were employed in September 2022 than there were in September 2021, an increase of 3 percent.

“Wage growth and price inflation have supported tax collections so far this year.” Secretary of Finance Stephen Cummings said in the press release. “However, changing economic conditions and Fed policy are heightening our concerns about growth in the second half of the fiscal year. Aggressive actions by the Federal Reserve to halt inflation are likely to result in an economic downturn that significantly impact tax revenues.”