Virginia’s General Fund Revenues On Point with Recent Projections

Governor Glenn Youngkin Reports Promising Financial Strides in the Commonwealth.

Virginia’s Fiscal Forward Motion
The economic health of Virginia remains robust and on track, as announced by Governor Glenn Youngkin. The general fund revenues for September 2023 are consistent with the most recent updates to the official revenue forecast. Interestingly, compared to the estimates in the amended budget, the revenues are up by an impressive $412.1 million. This surge is mainly attributed to the rise in non-withholding revenues. Most major sources of income, in fact, are either on par with or surpassing projections.

A Governor’s Insight
Amidst external challenges, Governor Youngkin emphasized Virginia’s efforts to alleviate the pressure on its residents. He stated, “With the increased costs of gas and groceries due to inflation caused by excessive federal spending, we recently ratified Virginia’s revised budget. This included an extra $1 billion for tax relief, aiming to further reduce living expenses for our families, veterans, and workers.”

He went on to express confidence in the state’s economic evaluation processes, noting the positive trends in economic markers and employment figures, indicative of Virginians getting back to work. Yet, while the state is economically strong, the Governor highlighted the need to keep an eye on global events, especially after the tragic terrorist attack in Israel and ongoing inflation issues domestically.

A Financial Overview from the Secretary
Stephen Cummings, the Secretary of Finance, provided a deeper look into the numbers. He noted, “In the first quarter of the fiscal year 2024, our general fund revenues have surged by 17.9 percent year-over-year, surpassing our expectations. This is largely due to the higher individual income non-withholding and corporate income tax collections.”

Cummings went on to highlight that the two main revenue streams, which give us a real-time picture of the state’s economic health – payroll withholding and sales tax collections (adjusted for policy shifts) – have grown by 3.5 percent. This is a clear sign of consistent economic progress. With the year’s results and a prudent forecast, Cummings voiced confidence in the fiscal predictions for 2024 while also noting the importance of staying alert to global and national economic events.

The Broader Picture
For September alone, the general fund revenues skyrocketed by 51.9 percent without any adjustments. If we look at the figures year-to-date leading up to September 30, there’s an increase of 17.9 percent from the previous year. After making policy adjustments and considering the timing of the Pass-Through Entity Tax (PTET) refunds, the revenue growth for September stands at 9.4 percent and 8.6 percent year-to-date. When we consider policy adjustments without PTET, the growth is pegged at 4.0 percent up to September.

For those keen on diving deeper into the financials, the complete revenue report for September 2023 is accessible for review.