Total General Fund revenues rose 66.2 percent in May, the largest monthly revenue increase in more than 50 years, Gov. Ralph Northam said in a release.
Over 85 percent of the growth in May can be attributed to a return to normal tax filing dates for estimated payments and a shorter extension this year for individual final payments.
Northam also announced the appointment of Joe Flores as Secretary of Finance and Carter Hutchinson as Deputy Secretary of Finance.
May is typically a significant month for revenue collections. In addition to regular collections of withholding and sales taxes, estimated and final payments for individuals are normally due May 1, however, last year the filing date was extended to June 1. This year, the due date for final payments was moved to May 17 to align with the federal due date. To accurately assess growth, data for the entire quarter of April through June will be needed.
“Virginia’s economy is roaring back to life thanks to hard work following the science and one of the strongest pandemic responses in the country,” said Governor Northam. “New COVID-19 cases are at record lows, our vaccination rates are among the nation’s highest, and Virginians are heading back to work—and these record revenue gains are the result. Our responsible governance is paying off, and we will keep this up as we approach a new budget year and face major decisions about how to best use federal funding from the American Rescue Plan. We have a strong team with the right experience—Joe Flores is a highly-qualified, dedicated public servant with a deep understanding of the state budget and a strong background in fiscal policy, and I am confident our economic momentum will continue.”
Flores has served as Deputy Secretary of Finance in the Northam Administration since January 2018, where he has helped lead initiatives like Medicaid expansion and spearheaded how the Commonwealth uses and distributes federal stimulus funds during the pandemic. Hutchinson has served as Deputy Policy Director in the Northam Administration since January 2018.
“We have a great deal of important work ahead of us in the coming months to manage the Commonwealth’s finances as we emerge from the pandemic and rebuild our economy,” Flores said. “I am grateful to Governor Northam for this opportunity and look forward to continuing to serve alongside our strong team in the Finance secretariat, including Deputy Secretary June Jennings and the leadership and staff at our agencies.”
On a fiscal year-to-date basis, total revenue collections advanced 17.8 percent, above the annual forecast of 2.7 percent growth. Collections in June must total $0.3 billion to attain the revenue forecast in Chapter 552, compared with June collections in the two years prior to the pandemic of about $2.4 billion. Collections of payroll withholding taxes grew 13.8 percent in May. Collections of sales and use taxes, reflecting April sales, grew 37.5 percent in May.
“It has been a tremendous honor to serve the Commonwealth and the Northam Administration, and I have complete confidence that Virginia’s finances will be in good hands with Joe Flores at the helm,” said Secretary of Finance Aubrey Layne. “May is a significant month for collections for non-withholding, with final payments for tax year 2020 and the first estimated payment for tax year 2021 both due at the beginning of the month. Last year, the filing date was extended to June 1 for both payments, and this year to May 17 for only the final payment, so the effect on the timing of collections is unclear.”
On a year-to-date basis, collections of payroll withholding taxes—62 percent of General Fund revenues—increased 4.4 percent, ahead of the annual forecast of 2.7 percent growth. Sales and use tax collections advanced 11.1 percent on a fiscal year-to-date basis, ahead of the annual forecast of 4.7 percent growth. On a fiscal year-to-date basis, total revenue collections grew 17.8 percent in May ahead of the annual forecast of 2.7 percent growth.
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