State posts 8.3 percent revenue growth in May
In addition to regular collections of withholding and sales taxes, estimated and final payments for individuals were due May 1, and corporations with a fiscal year ending other than Dec. 31 – primarily retailers – had final payments due in May.
The May revenue gains were driven by strong individual withholding receipts which rose 16.8 percent partly due to an extra deposit day compared with May of last year. Other sources contributed to the growth. These include corporate income tax revenues which rose 54.9 percent as compared with May 2011, though May is not typically a significant month for corporate tax receipts, and recordation taxes which grew 24.4 percent in May using the same comparison. However, non-withholding receipts were slightly down for the month and numbers from the month of June, always a very important month for revenue collections, will give a far better indication of Virginia’s overall fiscal picture.
On a year-to-date basis, total revenue collections rose 6.2 percent through May, ahead of the revised annual forecast of 4.5 percent growth. Adjusting for the accelerated sales tax program, total revenues grew 5.9 percent through May, ahead of the adjusted forecast of 4.7 percent growth. The overall 8.3 percent growth rate in May follows a 10.6 percent growth rate in April.
“Virginia’s recovery continues to demonstrate why this is the best state in the nation in which to do business and live the American Dream,” Gov. Bob McDonnell said in a statement. “Our falling unemployment rate, down to its lowest point in over three years, and recent positive news about state revenues, are a result of the common-sense policies we’ve enacted here in Richmond, and, more than anything else, the innovation, talent and skill of the incredible people of this state.”
This month’s revenue report contains the official general fund revenue forecast included in House Bill 1300, which was approved on May 25, 2012. The approved forecast estimates that general fund revenues will increase of 4.5 percent for fiscal year 2012, compared with 4.6 percent in the forecast used with the proposed budget (HB/SB 29) introduced on Dec. 19, 2011.