Lawmakers reserve judgment on tax outlook
Virginia’s erratic tax revenues offered few surprises in December for state officials or legislators, who are still waiting for January results to gauge how much money will be available for the twoyear budget they are scheduled to approve at the end of February.
The December numbers weren’t as bad as they looked. Revenues declined 1 percent because income taxes withheld from payroll fell by 5.8 percent compared with the same month a year earlier, but the decline was expected because last month included one less payroll deposit day than the previous year.
Gov. Terry McAuliffe was upbeat about revenue collections through the first six months of the fiscal year, which increased by 4 percent, ahead of the revised annual forecast of 2.9 percent. Payroll withholding, accounting for 63 percent of all state revenues, were up 4.5 percent for the first six months of last year, as well as the revised annual estimate of 3.6 percent.
“At the halfway point, it’s good news,” House Appropriations Chairman S. Chris Jones, R-Suffolk, said Thursday.
However, state officials and legislators are reserving judgment until next month, when they receive January results, which will reflect sales tax collections over the Christmas holiday in December.
December revenues reflected sales tax collections in November, the beginning of the holiday shopping season, and showed a year-to-year gain of 10.4 percent. However, sales tax collections for the fiscal year still lag the annual forecast.