State revenue collections decreased by 2 percent in February over the prior year mainly due to one fewer deposit day. February is not generally a significant month for revenue collections. On a year-to-date basis, total revenue collections rose 5.5 percent through February, ahead of the annual forecast of 3.6 percent growth.
The revenue decrease was primarily driven by withholding (-5.7 percent) and nonwitholding (-14.5 percent) collections. Sales tax revenues, which include the final post-holiday sales and gift card purchases, rose 10.3 percent in February. Adjusted for the accelerated sales tax program, total state revenues grew 5.1 percent through February, slightly ahead of the forecast of 3.4 percent growth.
“While overall economic indicators continue a trend of progress and recovery, this month’s decline in revenue reminds us that our future economic growth is still insecure and uncertain,” said Gov. Bob McDonnell. “Virginia continues to fare better than neighboring states. Our unemployment rate is the lowest in the state in four years, the lowest in the Southeast, and the second-lowest east of the Mississippi. Virginia has added over 140,000 net new since February 2010. The increases in revenue and reductions in unemployment are signs that Virginia is emerging from the recession and that fiscally responsible management is making a positive impact on our economic recovery.”
The February revenue numbers are available at this link: http://www.finance.virginia.
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