Revenue collections remain ahead by nearly $500 million
Thu, May 18, 2023 12:40 PM
By By Sarah Roderick-Fitch | The Center Square, The Center Square
(The Center Square) – Virginia Gov. Glenn Youngkin says the commonwealth is ahead almost $500 million for the year-to-date general revenue collections – consistent with a prior forecast.
The revenue collections in the first 10 months of the fiscal year were 2.7% higher – adjusted for policy or timing impacts. Although, the unadjusted revenue collections were down 8.2% in April, a 0.9% reduction for the fiscal year-to-date.
The April Revenue Report says the decline was “mainly due to a 9.4% drop in volatile nonwithholding revenues that are associated with capital gains realizations.” Secretary of Finance Stephen Cummings said the decline was less than expected for April.
“As a result, year-to-date collections are now ahead of the December forecast by nearly $500 million, and we anticipate that full fiscal year collections will exceed projections," he said. "The economic downturn that was assumed in our forecast in the current fiscal year is now likely to materialize two to three quarters later than expected. Consequently, any revenue surplus in the current fiscal year may offset lower revenues in fiscal year 2024.”
Youngkin applauded the commonwealth’s “accurate” revenue.
“As the most significant revenue collection month for Virginia, April provides with the clearest picture to-date that our December forecast continues to be an accurate model of the financial state of the commonwealth,” said Youngkin.
The governor touted the positive revenue outlook as evidence Virginia is in a good place to move forward with proposed initiatives.
“Our government remains in a strong position to accelerate results for Virginians with transformational investments in behavioral health care, community safety, child literacy and Virginia’s energy future," said Youngkin.
He used the report to promote his administration's and fellow Republicans' tax cuts, which has been a sticking point with Democrats in finalizing the budget. Youngkin proposed roughly $1 billion in tax cuts.
"Virginia can reduce taxes and lower the cost of living for local businesses and families throughout the commonwealth. There’s plenty of money flowing into the system to continue delivering results for Virginians,” the governor said.
Net individual income tax accounts for 67% of general revenue funds, while 19% comes from sales tax – followed by corporate income tax at 7% of the general fund revenues. The other revenues derive from wills, suits, deeds, contracts and insurance premiums.
April is the most significant revenue collection month. It is the month tax payments for individuals, sales tax, insurance companies and a majority of corporations remit their payments.
The month “also marks the peak month for individual income tax refund processing. This year was also the first year of final collections for the new Pass-Through Entity Tax,” according to the report.