Virginia Revenues Top Forecast, But Economic Concerns Remain

Virginia’s general fund revenues continue to come in ahead of expectations, but state leaders are warning that economic uncertainty could still lie ahead.

Governor Abigail Spanberger announced that March revenues grew by 14.3 percent compared to the same month last year. Overall, collections through the first nine months of Fiscal Year 2026 are up 7.4 percent.

So far, revenues are running 3.2 percent ahead of the state’s official forecast.

The growth has been driven largely by strong individual income tax collections and solid sales tax receipts. However, corporate income taxes have not kept pace, according to state officials.

“While revenues continue to exceed forecast, the broader economic environment is not showing the same strength,” Spanberger said. She pointed to a softening job market, noting that Virginia’s unemployment rate has increased over the past year while employment has declined compared to last March.

Spanberger also highlighted rising fuel costs tied to the ongoing conflict in the Middle East, along with low consumer confidence, as factors contributing to a more uncertain outlook.

Secretary of Finance Mark Sickles said March’s gains were influenced in part by more unpredictable revenue sources, including non-withholding tax payments and fewer refunds than expected.

“Next month, we will have a much better understanding of the impact of refunds on revenues as more Virginians file their taxes,” Sickles said, adding that caution remains important given global and economic pressures.

Individual income tax collections — the largest share of state revenue — are up nearly 10 percent compared to last year. Payroll withholding, closely tied to wages, has also increased, rising 8.4 percent in March and 6 percent year to date.

Despite the strong numbers, state officials say the mixed signals in the broader economy mean Virginia should remain cautious in the months ahead.

The full March 2026 revenue report is available here.