Virginia general fund revenue collections surprisingly outpacing gloomy projections
Virginia general fund revenues are up 6.7 percent through the end of October, outpacing projections of a decrease in the face of the public response to the COVID-19 pandemic.
“This month’s revenue report shows that Virginia is on sound financial footing despite the ongoing COVID-19 pandemic,” Gov. Ralph Northam said. “We must stay focused on beating this virus first and foremost, so we can remain on a road to recovery and continue moving our Commonwealth forward.”
The annual forecast had projected a 1.8 percent decrease.
Revenue collections actually fell 2.7 percent in October despite solid growth in sales and use taxes and recordation tax collections.
“The drop in October revenues largely reflects an anticipated decline in payroll withholding,” said Secretary of Finance Aubrey Layne. “Although October is not a significant month for revenue collections, this report confirms that Virginia continues to be on a prudent path of forecasting revenues and budgeting in these unique times.”
Collections of payroll withholding taxes fell 4.6 percent in October, following a strong 11.4 percent gain in the previous month. Collections of sales and use taxes, reflecting September sales, rose 8.6 percent in October.
Collections of wills, suits, deeds, and contracts — mainly recordation tax collections — were $59.9 million in October, compared with $42.3 million in October of last year, a 41.5 percent increase.
The Joint Advisory Board of Economists met last week to assess recent economic developments and the economic outlook for the current and next biennium. The Governor’s Advisory Council on Revenue Estimates will meet on Nov. 23 to evaluate both the JABE economic recommendations and revenue collections through October.
GACRE members’ recommendations will be incorporated into the General Fund revenue forecast to be released on Dec. 16 when the governor meets with the money committees of the General Assembly.
The full report is available here.