Revenue numbers up, but not enough?
And yet to hear the governor tell it, the numbers indicate a need for continued belt-tightening.
“As the General Assembly considers the biennial budget, it is crucial that we continue our conservative fiscal approach and exercise discretion and restraint in our spending decisions,” Gov. Bob McDonnell said. “Virginia’s economy continues its long-term trend of recovery from the economic challenges of past years, but the growth has slowed and remains subject to many unstable factors. The fragile national economy, persistent uncertainty in federal funding, and world and national events demand a conservative, responsible fiscal approach to spending in this budget.
“We must invest our limited state resources in core government functions like K-12 education, our colleges and universities, public safety and transportation, while allocating new funding to Virginia’s rainy day fund and our newly established federal action contingency fund to help prepare the Commonwealth for whatever may occur in the years ahead. I look forward to working with the General Assembly to enact this budget in the weeks ahead,” McDonnell said.
The January revenue gains were reflected across all major revenue sources except recordation and insurance premiums taxes, according to data provided by the governor’s office. These changes over January of last year include, collections of payroll withholding taxes which rose 3.2 percent, collections of income tax non-withholding which rose 4.4 percent, sales and use tax collections which rose 4.4 percent, and collection of corporate income taxes which rose 53.2 percent. The increase in corporate income taxes was likely due to receiving some of the December receipts in January.
The Commonwealth issued its general fund revenue forecast in December, revising total general fund revenues to grow by 4.6 percent in fiscal year 2012.