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Commonwealth on Pace to Post Revenue Surplus on June 30th

Posted by Stephen on June 14, 2010

May Revenue Collections Decline by Only 0.2%, Beating Budget Projection of 2.3% Decrease

Follows Back to Back Months of Revenue Collection Increases; April and May Mark First Consecutive Months of Positive Growth in Sales and Use Tax Collections since November-December 2007

RICHMOND- Governor Bob McDonnell announced today that May revenue collections significantly outperformed projections. General fund revenue collections declined by only 0.2 percent, far outpacing the budget forecast of a 2.3% decline. With the new numbers in, and on the heels of the first back to back months of increases in general fund revenue collections since March-April 2007, the Commonwealth is now on pace to post a revenue surplus at the conclusion of the fiscal year on June 30.

To ensure a surplus the Commonwealth needs to collect $1.37 billion in general fund revenues in June. The Commonwealth collected $1.5 billion in June 2009, in a slightly softer economy. In addition to beating May’s forecast for general fund revenue collections, Virginia also recorded the first back to back months of positive growth in the collection of sales and use taxes since November-December 2008. Sales and use tax collections increased by 6.5% in May, after rising by 7.3% in April.

Speaking about the latest revenue report, Governor McDonnell noted, “To beat revenue projections by two percentage points is a positive sign for the Commonwealth’s economic recovery. I am particularly heartened by the back to back months of increases in collections of sales and use taxes. This is a small, yet very important, indicator that activity is returning to our economy, and Virginians are regaining some confidence in both the general fiscal outlook for our state and nation as well as the outlook for their own specific situations. There is much work to be done, and many more positive reports will be needed, before we can truly say we have turned the corner on one of the worst economic downturns in our nation’s history. However, today’s revenue report contains a number of items that should be highlighted, and provide some welcome good news after years of the opposite. Finally, it must be noted that if June’s general fund revenue collections are equal to the numbers from a year ago, the Commonwealth will post its first revenue surplus since June 30, 2008. This past session of the General Assembly we came together across party lines to make the hard choices necessary to close an historic budget shortfall without a tax increase. Our fiscal responsibility is positioning Virginia for economic growth and job creation in the years ahead.”

The May revenue numbers are available at this link:

http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2009-2010/2010ReportsList.cfm

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