Halfway Through Fiscal Year: Virginia’s General Fund Revenues Align with Forecasts

Governor Glenn Youngkin recently shared positive news about Virginia’s financial health. As of December 2023, the state’s general fund revenues are keeping pace with the forecasts. With a modest growth of 0.2 percent in December compared to last year and an impressive 7.1 percent increase year-to-date, the state’s financial situation appears stable.

Governor Youngkin emphasized the accuracy of their financial projections, acknowledging the ongoing economic risks and uncertainties. He reiterated the commitment of his administration to reduce the cost of living for Virginians and foster a competitive economic environment for businesses in the Commonwealth.

Secretary of Finance Stephen Cummings noted that revenue collections are slightly above the plan for the fiscal year’s first half. He reported a surplus of $363 million against the revised forecast. However, he also advised a cautious outlook due to uncertainties around refunds and non withholding collections.

A closer look at the revenue sources reveals a mixed bag. Payroll withholding taxes saw a 3.8 percent increase compared to last year, with a year-to-date growth of 2.1 percent through December. On the flip side, sales tax collections dipped by 1.3 percent year-to-date. Interestingly, corporate income tax revenues showed a significant rise of 14.8 percent compared to the previous year.

The data aligns closely with the Governor’s amendments to the Fiscal Year 2024 budget. Excluding some distortions caused by the new Pass-Through Entity Tax, collections are ahead of the forecast by $85.8 million.

This financial update offers a glimpse of Virginia’s economic resilience and prudent fiscal management. It’s a delicate balance of optimism and caution as the state navigates through economic uncertainties.

The full December 2023 revenue report is available here.