Commonwealth Posts 3.9 Percent Revenue Growth in September
~ Modest growth tempered by continued insecurity in federal funding and uncertainty of national economy ~
Governor Bob McDonnell announced that September revenue collections increased by 3.9 percent over the prior year. This is the 18th month out of the last 19 in which state revenue collections exceeded the previous year's amount. However, lingering economic uncertainty and the lack of clarity in federal funding forecasts continue to prompt caution for Virginia officials planning for the 2012 budget.
September is a significant month for revenue collections because estimated payments from individuals, corporations and insurance programs are all due in September along with regular monthly collections of withholding, sales taxes and other sources. The revenue increase was primarily driven by a 17.3 percent growth in individual non-withholding payments and a 5.8 growth in sales and use taxes. Conversely, receipts for individual income tax withholding fell by 3.7 percent. On a year-to-date basis, total revenue collections have risen 6.7 percent, ahead of the revised annual forecast of 3.7 percent growth. Adjusted for the accelerated sales tax program, state revenues have grown 5.6 percent, ahead of the economic base forecast of 3.5 percent growth.
“While Virginia’s economy continues its trend of growth this month, all indicators at the state and national level highlight the need for caution in forecasting and budgeting as our economy struggles to regain its footing,” Governor McDonnell said. “Virginia’s economy continues to show modest growth and signs of improvement that surpass those of the nation’s economy as a whole, but the fragile national economy, persistent uncertainty regarding federal funding decisions, and our economy’s vulnerability to upheaval due to national and world events prompts economists and elected officials to take a cautious, conservative fiscal approach.
“Sadly, more than 250,000 Virginians are still out of a job. This is unacceptable and it is making daily life extremely difficult for Virginians struggling to find work. We must do all we can to help them find the good jobs they deserve. We also know that the nation’s economic recovery has slowed in recent months, and that there are still many difficult days ahead. This is why it is vital that we do not lose our focus on the economy and job creation, and we take the steps now to ensure that we remain on solid financial footing in the coming months and years. Our administration is committed to implementing aggressive policies that reduce unnecessary spending, invest in the core functions of government, encourage economic growth, help private-sector companies add jobs, and nurture a strong and growing economy in the years ahead.”
The September revenue numbers are available at this link: http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2011-2012/2012ReportsList.cfm