Commonwealth Posts 19.5 Percent Revenue Gain in January But Economic Uncertainty Remains

RICHMOND – Governor Bob McDonnell announced today that total general fund revenue collections rose by 19.5 percent in the month of January. The increase was fueled in large part by an additional deposit day which helped boost individual withholding payments by 17.5 percent for the month. Further, with the Internal Revenue Service’s delay in opening the federal electronic filing program, Virginia saw a corresponding postponement in state refund activity in January.  Individual nonwithholding payments rose by 42.7 percent in January as the fourth estimated payment for tax year 2012 was due January 15, 2013.  However, sales tax receipts registered an increase at 0.2 percent reflecting deteriorating consumer confidence and softer retail sales during the holiday season.  Sales tax collections, adjusted for the partial repeal of the accelerated sales tax program, have grown 2.1 percent year to date and are now trailing the forecasted growth of 3.2 percent. January is a significant month for revenue collections On a year-to-date basis, total revenue collections rose 6.2 percent through January, ahead of the annual forecast of 3.6 percent growth. Adjusting for the accelerated sales tax program, total revenues grew 5.8 percent through January, ahead of the adjusted forecast of 3.4 percent growth.

Speaking about the new revenue numbers, Governor McDonnell remarked, “Virginia’s economy continues to slowly recover. Our unemployment rate has fallen to a four-year low, and state revenue collections are increasing. This is progress, and it is testament to the bipartisan work we’ve done in Richmond to help create a positive economic environment for our private sector job creators. More Virginians are working, and that is having a positive impact on the Commonwealth’s bottom line.

The Governor continued, “However, while these numbers are positive, there is still tremendous uncertainly ahead. Sequestration is a direct threat to our economic recovery, and to the jobs of thousands of Virginians. The President and Congress must come together to ensure that sequestration does not take effect; it would have a devastating impact on our state. At the same time, we must ensure our actions at the state capitol add to the financial health and vitality of our statewide economy. Over the past three years we’ve made government more efficient and effective, while investing in the core functions of government. That fiscal restraint, combined with the setting of spending priorities, has helped make college more affordable and accessible for our students, improved our transportation system, and brought major new employers to Virginia. Now, this session, we must continue our efforts. Virginia’s economy depends on Virginia’s transportation system. It is time to put in place the long-term funding plan necessary to ensure that we have a 21st Century transportation system that will help our economy continue to grow, and our citizens to find the good-paying jobs they need. This is our opportunity to get that done, and I urge all legislators, from both parties and all regions, to work with us in the weeks ahead to make it happen.”

The January revenue numbers are available at this link: