April 2018 Virginia General Fund revenue collections up 17.8%

RICHMOND—Governor Northam announced today, May 11,  that April revenue collections grew 17.8 percent.  On a fiscal year-to-date basis, total revenue collections rose 6.7 percent, ahead of the annual forecast of 3.4 percent growth.

“This strong report increases the likelihood that we may end the year with more revenues than we anticipated,” said Governor Northam. “As we complete our work on the Commonwealth’s budget, we should use this opportunity to strengthen Virginia’s financial position by investing any unanticipated revenues in our cash reserve. By taking a conservative approach we will protect our Triple-A bond rating and insulate Virginia families from future uncertainty that could stem from federal tax changes or chaos in Washington.

“This is the first month of the all-important fourth quarter of the fiscal year. We should hope these trends continue but prepare for an unexpected downturn. I look forward to working with the General Assembly to build on this momentum by passing a strong budget that expands health care to Virginians who need it.”

With one more deposit day compared to April of last year, collections of payroll withholding taxes increased 6.1 percent for the month.  Collections of sales and use taxes, reflecting March sales, advanced 5.3 percent in April.  April is a significant month for nonwithholding collections.  Final payments for tax year 2017 and the first estimated payment for tax year 2018 are both due May 1.  Typically, a portion of final payments due May 1 for calendar year 2017 are received in April; however, the amount varies from year to year.  Estimated and final payments will continue to be processed in May.  Therefore, April and May collections must be analyzed together to accurately assess growth in this source.  Nonwithholding payments were $876.9 million in April, 39.6 percent above the level a year-ago.  Also in April, corporations made their first estimated payment for tax year 2018, and made either a final or extension payment for tax year 2017.  Collections of corporate income taxes were $181.0 million in April, compared with receipts of $162.5 million in April of last year, an 11.4 percent increase.

On a year-to-date basis, collections of payroll withholding taxes—64 percent of General Fund revenues—are 4.4 percent above the same period last year, ahead of the estimate of 3.5 percent growth.  Sales tax collections—18 percent of General Fund revenues—increased 3.2 percent, ahead of the annual estimate of 3.0 percent growth.  Year-to-date, nonwithholding collections are 23.6 percent above the same period last year, well ahead of the annual estimate of a 4.3 percent gain.  Fiscal-year-to-date, corporate income tax collections were up 7.2 percent, ahead of the annual forecast of 5.7 percent.  On a fiscal year-to-date basis, total revenue collections have increased 6.7 percent through April, ahead of the annual forecast of 3.4 percent growth.

May and June are also significant collection months.  Individual estimated and final payments will continue to be processed in May and estimated payments for individuals, corporations and insurance companies are due June 15.

To view the full report, click here.