RICHMOND—Governor Ralph Northam today sent a letter to the General Assembly Money Committees announcing that a final mid-session revenue analysis shows Virginia’s tax revenues continue to strengthen.
The additional data means total revenues and transfers for fiscal year 2021 will be revised upwards by an additional $410.1 million. Fiscal year 2022 total revenues and transfers will be revised upward by an additional $320.1 million. In total, the Commonwealth expects an additional $730.2 million over the forecast from December 2020.
“These revised budget numbers tell us that Virginia’s economy continues to thrive, in spite of the pandemic,” said Governor Northam. “Before the pandemic, we had passed the most progressive budget in Virginia history. These additional dollars help us get back to that historic budget and allow us to move forward with our shared priorities—providing Virginia families and businesses the relief they need to get back on their feet, supporting public schools, and giving our public workers a pay raise.”
The revenue analysis was completed after the Commonwealth’s books closed on February 8, 2021. January’s monthly revenue report provided additional data on retail sales tax collections for the holiday shopping season as well as individual estimated payments, corporate income tax, and the recordation tax.
Governor Northam provided these additional revenues at a meeting with the Money Committee chairs this morning. He will meet with budget conferees later this week for further discussions on shared priorities.
See below or click here for the full text of Governor Northam’s letter.
February 15, 2021
The Honorable Janet D. Howell
Chair, Finance and Appropriations Committee
Senate of Virginia
Pocahontas Building, Room E506
Richmond, Virginia 23219
The Honorable Luke Torian
Chair, Appropriations Committee
Virginia House of Delegates
Pocahontas Building, Room W1304
Richmond, Virginia 23219
Dear Senator Howell and Delegate Torian:
Since the time I met with the members of GACRE late last fall, I have continued to monitor our revenue collections. Through January revenues increased 6.0 percent over the prior year, well ahead of the current annual forecast of 1.2 percent. Our economy is rebounding and is generating growing revenues to fund services that Virginians expect—from public schools to salaries for public workers and much more.
Accordingly, I have instructed my Finance staff to perform a mid-session revenue forecast. My review of the data indicates that it is reasonable to increase projected General Fund resources by $730.2 million for the 2020-2022 biennium. This adjustment is based solely on the trend of actual revenue collections year to date and incorporates a re-evaluation of the sales tax forecast. The underlying economic forecast has not changed from the one that we reviewed last November during the GACRE meeting.
Sources of this additional revenue are detailed in the attachment titled Mid-Session Revenue Review. In addition, I have also instructed Secretary of Finance Aubrey Layne to review this information with your respective staffs.
As the General Assembly Session has progressed, we have worked diligently together to address very important issues facing the Commonwealth, and it is my hope we continue to do so during these next few weeks—and beyond.
Ralph S. Northam
Cc: April Kees – Staff Director, Senate Finance and Appropriations Committee
Anne Oman – Staff Director, House Appropriations Committee
The Honorable Aubrey L. Layne, Jr. – Secretary of Finance