Virginia general fund revenues up 9.3 percent in September
September General Fund revenue increased 9.3 percent from the previous year, driven by broad-based growth in payroll withholding, sales, individual nonwithholding, corporate, and recordation tax collections.
“The strength of the Virginia economy continues to contribute to positive revenue growth and low unemployment,” said Gov. Ralph Northam. “This report is a clear indication that we are making real progress in our efforts to grow and diversify the state’s economic base and bring new job opportunities to every corner of the Commonwealth. My administration will stay focused on maintaining the momentum we have built so that every Virginian has the ability to share in our success, no matter who they are or where they live.”
September completes the first quarter of fiscal year 2020 and is a significant month for revenue collections. Estimated payments from individuals, corporations, and insurance companies are all due in September, along with regular monthly collections in withholding, sales taxes, and other sources.
Payroll withholding grew 3.4 percent in September. September is a significant month for collections in nonwithholding, since the first estimated payment for fiscal year 2020 is due. Collections in nonwithholding grew 17.2 percent in September from last year. Collections of sales and use taxes, reflecting August sales, grew 9.0 percent in September—all of this gain is due to the anticipated increase in Internet-related revenues. As with nonwithholding, September is a significant month in corporate income tax collections, since the first estimated payment for the fiscal year is due in September. Collections of corporate income tax increased 13.2 percent in September from September of last year. Finally, collections of wills, suits, deeds, and contracts—mainly recordation tax collections—were $36.6 million in September, compared with $27.1 million in September of last year.
“I would caution against reading too much into the Commonwealth’s robust first quarter performance,” said Secretary of Finance Aubrey Layne. “Even though revenue growth this quarter was strong, historically, the general fund revenue picture will not become clear until final payments are collected from individuals and corporations next spring.”
On a fiscal year-to-date basis, total revenue collections rose 8.2 percent, well ahead of the annual forecast of a 1.2 percent increase. On a fiscal year-to-date basis, collections of payroll withholding taxes—63 percent of General Fund revenues—increased 5.8 percent, ahead of the annual estimate of 4.2 percent. Year-to-date nonwithholding collections were $617.6 million compared with $530.3 million in the same period last year, increasing by 16.5 percent, ahead of the annual estimate of a 3.5 percent decline.
Sales tax collections—17 percent of General Fund revenues—increased 7.8 percent through September, ahead of the annual forecast calling for a 4.2 percent increase. Through the first quarter of the fiscal year, corporate income tax collections rose 8.5 percent from the same period last year, behind the annual estimate of a 9.3 percent increase. Finally, collections of wills, suits, deeds, and contracts were up 25.4 percent in the first quarter, well ahead of the forecasted 4.6 percent decline.
The full report is available here.