Virginia’s September general fund tax revenues hit nearly $1.9 billion, less than last year’s September revenues of $2.6 billion, but the governor’s office emphasized that the decrease was expected as a result of tax policy changes. Adjusted for those changes, tax revenues were up 10.7 percent year over year.
“Adjusted for the impacts of planned policy actions, including the historic tax rebates of nearly $900 million recently delivered to Virginians, September revenue collection increased more than 10 percent compared to a year ago,” Governor Glenn Youngkin said in a Friday press release. “September is a typically strong month for revenues, and this year was consistent with that precedent. At the same time, economic data remains mixed, the job market shows stability but the persistent inflation from misguided efforts in Washington continues to be the silent thief stealing more and more from the paychecks of hardworking Virginians.”
The recently-passed budget included $250 state income tax rebates for single-payers and $500 for joint payers; those checks were mailed out beginning in September. Additionally, the legislation ended Virginia’s accelerated sales tax.
Despite the decline in September revenues, Youngkin’s release notes that revenues exceeded forecasts in the first quarter of fiscal year 2023. In September, payroll tax withholding increased, thanks to higher wages and a good labor market – 128,000 more Virginians employed in August 2022 than in August 2021. Still, the release notes that Virginia is still only at 97.2 percent of pre-pandemic employment rates. Youngkin compares Virginia to several key southern states as part of his argument for policy changes in Virginia, and his release notes that those states have already exceeded pre-pandemic employment levels.
“First quarter collections exceeded budgeted revenues by more than $500 million reflecting the continued strength in Virginia jobs and wages. Consumers are continuing to spend, and estimated payments for nonwithholding income were consistent with last year’s pace,” Secretary of Finance Stephen Cummings said in the release. ”However, continued high inflation and rapidly rising interest rates are beginning to impact some key economic indicators, and the Administration is continuously monitoring other metrics which provide further caution for the current outlook for our economy. As we begin the annual revenue forecasting process for the budget to be delivered by the Governor in December, we will continue working with JABE and GACRE to deliver a forecast that will be the basis for a fiscally sound budget.”
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Eric Burk is a reporter at The Virginia Star and The Star News Network. Email tips to [email protected].
Photo “Virginia Capitol” by Martin Kraft CC3.0.
