|RICHMOND—Governor Ralph Northam today announced that General Fund revenues fell 2.7 percent in October with solid growth in sales and use taxes and recordation tax collections offsetting an expected decline in payroll withholding.
“This month’s revenue report shows that Virginia is on sound financial footing despite the ongoing COVID-19 pandemic,” said Governor Northam. “We must stay focused on beating this virus first and foremost, so we can remain on a road to recovery and continue moving our Commonwealth forward.”
Regular monthly collections are due in withholding, sales taxes, and most minor sources. On a fiscal year-to-date basis, total revenue collections grew 6.7 percent, ahead of the annual forecast of a 1.8 percent decrease.
“The drop in October revenues largely reflects an anticipated decline in payroll withholding,” said Secretary of Finance Aubrey Layne. “Although October is not a significant month for revenue collections, this report confirms that Virginia continues to be on a prudent path of forecasting revenues and budgeting in these unique times.”
Collections of payroll withholding taxes fell 4.6 percent in October, following a strong 11.4 percent gain in the previous month. Collections of sales and use taxes, reflecting September sales, rose 8.6 percent in October. Finally, collections of wills, suits, deeds, and contracts—mainly recordation tax collections—were $59.9 million in October, compared with $42.3 million in October of last year, a 41.5 percent increase.
On a year-to-date basis, total revenues are up 6.7 percent through October, well ahead of the annual forecast of a 1.8 percent decline. Collections of payroll withholding taxes—64 percent of General Fund revenues—increased 0.4 percent, behind the annual forecast of 2.4 percent growth. Sales tax collections—16 percent of General Fund revenues—increased 7.8 percent through October, ahead of the annual forecast calling for a 9.7 percent decline.
The Joint Advisory Board of Economists (JABE) met November 4 to assess recent economic developments and the economic outlook for the current and next biennium. The Governor’s Advisory Council on Revenue Estimates (GACRE) will meet on November 23 to evaluate both the JABE economic recommendations and revenue collections through October. GACRE members’ recommendations will be incorporated into the General Fund revenue forecast to be released on December 16 when the Governor meets with the money committees of the General Assembly.
The full report is available here.