February General Fund Revenues Grew 4.1 Percent

Governor Abigail Spanberger today announced that February revenues grew 4.1 percent compared to the previous February. On a fiscal year-to-date basis through the first eight months of Fiscal Year 2026, collections have grown 6.6 percent. Growth has been driven by strong individual income tax and strong sales tax receipts, while corporate income taxes have lagged. Compared to the official forecast assumed in the amended budget, revenues are ahead of expectations by 2.5 percent.

“Overall revenues are on track to meet or exceed the amended budget for Fiscal Year 2026. However, significant portions of our growth stem from volatile revenue sources such as nonwithholding and refunds. Considering the rising global instability and this month’s anemic national jobs report, it is clear that macroeconomic headwinds are certainly present for the next biennium,” said Governor Abigail Spanberger. “Caution must be the watchword when looking out over the next twelve to twenty-four months.”

“February revenues came in roughly according to our expectations,” said Secretary of Finance Mark Sickles. “We have, however, seen a slowdown in payroll withholding and sales tax revenue. Those are the two key sources we pay attention to when thinking about the Commonwealth’s economic health. With the unfavorable balance of risks we’re seeing, reforecasting Fiscal Years 2027 and 2028 is difficult at this time. The normal autumn reforecasting process will be best equipped to handle our macroeconomic concerns.”

Net individual income tax revenues declined 0.4 percent for the month compared to February 2025. On a fiscal year-to-date basis, net individual income tax collections (which includes nonwithheld income tax and refunds) are up 9.4 percent. Payroll withholding revenues grew 1.9 percent year-over-year in February and are up 5.7 percent year-to-date. Collections of sales and use taxes, reflecting January sales, increased 2.0 percent in February and are up 5.4 percent year-to-date.

The full February 2026 revenue report is available here.