October revenue collections ticked up 3.7 percent in Virginia from last year — the seventh month in the last eight that the state has seen a year-over-year increase — though total collections so far this year lag behind the state’s projections.
The October growth in general fund collections was driven by a 4 percent increase in the withholding tax — the sixth straight month of growth in those revenues — and the sales tax, which has grown for a seventh consecutive month.
Still, tax collections so far this year are down 0.4 percent and lag the annual forecast of 2.6 percent growth, according to a memo from Finance Secretary Richard Brown.
Virginia Gov. Bob McDonnell noted that the revenue news coincided with a 0.1 percent drop in Virginia’s unemployment rate, which was 6.8 percent in September.
“Clearly, these are signs of a modest turnaround in Virginia’s economy,” he said. “However, this continues to be a very tough and uncertain economy and far too many Virginians continue to be out of work. These pieces of good news do not erase the clouds of uncertainty that still hang over our economic landscape.”
Still, the uptick is in stark contrast to the state’s finances during the throes of the recession; McDonnell and former Gov. Tim Kaine have cut billions from Virginia’s budget in response. From August 2008 through November 2009, for example, the general fund, which pays for such services as law enforcement and public schools, saw month-over-month revenue declines for 16 straight months.
In announcing the revenue numbers, McDonnell bragged that Virginia is second only to Texas in new jobs created since the start of his administration and reiterated his vision for government of facilitating economic growth via the private sector.
“Government does not create prosperity, and it does not create jobs,” he said. “What we can do in Richmond is put in place policies that make it easier for prosperity to be achieved and private-sector jobs to be created.”
The Associated Press contributed to this report.
