Virginia posts stronger-than-expected September revenues; officials warn uncertainty from federal shutdown and trade tensions

Virginia recorded stronger-than-expected September revenues and a year-to-date gain that Treasury officials say leaves significant one-time resources for the next budget cycle, but state finance officials and economists warned the committee that federal and international developments create near-term uncertainty.

Secretary of Finance Stephen E. Cummings told the Joint Money Committee that "September revenues grew 2.7% over prior year" and that year-to-date growth is 5.1%, a roughly $374,000,000 increase versus the prior year. He said September collections exceeded the month's forecast by about $294,000,000 and that, after accounting for fiscal adjustments and mandatory roll-ins, the Commonwealth has about $2,200,000,000 available for budgeting purposes.

The revenue strength is concentrated in payroll withholding and sales taxes, Cummings said. He described withholding growth as the most reliable signal of underlying revenue health and cautioned that large, nonwithholding collections are more volatile. "Primary revenue drivers withholding, sales and use taxes continue to be strong," he said.

Why it matters

The door to additional one-time spending or reserve-building in the next biennium…