General Fund revenues up halfway through FY23

Governor Glenn Youngkin announced the General Fund revenue collections for December 2022. Through the first half of the fiscal year, adjusting for policy actions and timing issues, general fund revenues were up 6.5 percent over the prior years. On an unadjusted basis, general fund revenues were 0.8 percent higher versus the projected 8.8 percent decline assumed in the Governor’s December proposed budget amendments for the full fiscal year.

“This revenue report confirms Virginia remains in a great position to make critical investments this year and lower taxes in the Commonwealth so that we can compete to win against our peer states,” said Governor Glenn Youngkin. “The consistent revenues we’ve seen throughout this fiscal year underscore the Commonwealth’s financial health and capacity to deliver tax cuts for families and local businesses throughout Virginia; I look forward to working together with the General Assembly to make this a reality, just as we did last year.”

“December results were slightly ahead of expectations, with our major revenue sources reflecting a stable job market and consumer with continued pressure on corporate profits,” said Secretary of Finance Stephen Cummings. “For the first half of the fiscal year, revenue collections are consistent with updated revenue projections included in the Governor’s proposed budget, and I am confident that in coming months, revenues will continue to meet or exceed our conservative forecast.”

Major policy and timing adjustments contributing to revenue growth include the impacts of the repeal of the Accelerated Sales Tax (AST) and the recently enacted optional Pass-Through Entity Tax, which affects the timing of payments but not total state tax liability for the year. These policies combined added $509 million to collections fiscal year-to-date. These were offset by tax rebates and changes to the standard deduction, which subtracted $1.2 billion to revenue growth for a net reduction of $728 million in the first 6 months of Fiscal Year 2023.

The full December 2022 revenue report is available here.