VA posts 5.3% revenue growth in August

~Fifth Month out of Last Six with Increase in Revenue Collections over Prior Year~

Governor Bob McDonnell announced today that August revenue collections increased by 5.3% over the prior year.

This is the fifth month out of the last six in which state revenue collections exceeded the previous year’s amount. The revenue increase was primarily driven by withholding and sales tax collections, a very good sign for the state.

The two revenue sources, which are most closely linked to current economic activity in the Commonwealth, extended their string of consecutive monthly increases to four and five months. However, adjusted for the accelerated sales tax program, total state revenues grew 3.3 percent through August, lagging the economic-base forecast of 4.2 percent growth. September collections will complete the first quarter of the fiscal year and will be critical in assessing current trends and the most likely path for total general fund revenues.

Speaking about the latest revenue report, Governor McDonnell noted, “The increase in revenue collections this August is a small, but positive, sign for Virginia’s economy especially in light of the performance of withholding receipts, the largest source of revenue for the general fund.

However, this remains a tough fiscal environment overall. In looking at the year to date we are slightly trailing the revenue forecast. We will know far more about our revenue picture, and what impact it will have on the biennial budget, after we see September’s numbers. The key to turning around our economy remains putting in place policies that free our entrepreneurs and businesses to create the good jobs Virginians need. That is the focus and mission of our Administration.”

The August revenue numbers are available at this link: http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2009-2010/2010ReportsList.cfm