August General Fund Revenues Exceed Forecast
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Governor Glenn Youngkin today announced that general fund revenues are ahead of forecast by $204.8 million year-to-date. Among the major sources, general fund revenues are up 3.0 percent year-to-date after adjusting for policy actions. Compared to August 2022, adjusted general fund revenues demonstrate a strong economic position for Virginia.
“As we accelerate results in the commonwealth to reduce cost of living and provide transformational investments in our communities, Virginia remains in a strong economic position,” said Governor Glenn Youngkin. “We’re encouraged by the results early in this fiscal year and continue to remain intentionally conservative in our forecast to provide an added buffer as we prepare the Commonwealth for future investments and any potential economic downturn in the future.”
“For the first two months of the fiscal year, collections are ahead of revenue projections assumed in the recently enacted budget, however it is too early to draw conclusions about full-year revenue collections,” said Secretary of Finance Stephen Cummings. “While the economy continues to show resilience even as interest rates have increased significantly over the past year, the risk of further rate hikes, inflation persisting above Fed targets, and other uncertainties including the potential for a federal government shutdown, cause us to remain cautious in our outlook over the near term. The next two months will provide a better indication of Fiscal Year 2024 revenue trends.”
In Virginia, the unemployment rate fell to 2.5 percent on a seasonally adjusted basis in July and the labor force participation rate increased to 66.7 percent in July – the highest labor force participation rate since November 2012. The number of employed Virginia residents increased by 17,937 to 4,481,008 in July.
Among the major revenue sources, withholding and sales tax collections are generally in line or ahead of projections, while corporate income tax revenues exceed forecast.
August is not a significant month for revenue collections, however, with collections mainly from withholding, sales taxes, and other sources that have regular monthly payments.
The full August 2023 revenue report is available here.