Virginia Economy: State government revenue collections up in March
Governor McAuliffe announced today that March revenue collections increased 11.8 percent. On a fiscal year-to-date basis, total revenue collections rose 7.1 percent, well ahead of the revised annual forecast of 4.7 percent growth contained in the budget bill as passed by the 2015 Session of the General Assembly – Chapter 665.
“These strong revenues are encouraging as we continue to work to attract business and create new jobs in the Commonwealth,” said Governor McAuliffe. “Even as our economy grows, we continue to be hampered by fiscal headwinds and the threat of poorly-devised congressional defense cuts. By diversifying and building a new Virginia economy, we can lay a stronger foundation for solid growth for years to come.”
Governor McAuliffe further noted, “The Virginia economy has improved as total employment grew 1.1 percent in February, the fastest rate in two years. The Commonwealth’s employment level has now surpassed the previous peak attained prior to the Great Recession. These employment gains underpin the strong performance in revenue collections.”
As for details, collections of payroll withholding taxes rose 10.3 percent in March, with an additional deposit day in the month as compared to last year. Because winter weather dampened retail sales, collections of sales and use taxes, reflecting February sales, rose only 0.8 percent in March.
While March is not a significant month for nonwithholding, receipts in this source were $151.1 million compared with $124.3 million in March of last year. Also, the Department of Taxation issued $330.3 million in refunds in March compared with $336.4 million last year, a 1.8 percent decline. For the January-March period, TAX issued about 1.6 million refunds, the same amount as last year during the first three months of the year. Finally, collections of wills, suits, deeds, and contracts – mainly recordation tax collections – were $31.6 million in March, compared with $23.0 million in March of last year for growth of 37.5 percent. After 13 consecutive months of negative growth, collections in this source have increased in six of the last seven months.
On a year-to-date basis, collections of payroll withholding taxes – 63 percent of General Fund revenues — increased 4.9 percent, ahead of the revised annual forecast of 4.0 percent growth. Sales tax collections – 19 percent of General Fund revenues – increased 4.0 percent through March, behind the annual forecast calling for a 4.9 percent increase. Adjusting for the accelerated sales tax program and the 0.1 percent sales tax transfer to transportation as required by law, total revenues rose 7.0 percent through March, ahead of the adjusted forecast of 4.5 percent growth.
To view the full revenue report click here.