Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the State Revenue topic
No spam. Unsubscribe anytime.
Secretary Sickles: Revenues exceed forecast but job losses and federal changes leave uncertainty
Summary
Secretary Sickles told the Senate committee in Richmond that Virginia is $850 million ahead of revenue forecasts but has lost nearly 42,000 jobs year to date and faces risks from federal changes to hospital funding and other programs.
RICHMOND — Secretary Sickles told the Senate committee that Virginia's general fund receipts are ahead of the official forecast by roughly $850 million, but he cautioned lawmakers that job losses and federal policy changes present near-term risks to the commonwealth's budget.
"We have lost almost 42,000 jobs in this fiscal year," Sickles said, adding that core revenue drivers remain sensitive to consumer spending and the timing of tax deposits. "There is certainly revenue that exceeds the forecast in the bank today. However, across to anyone who tried to tell us to use one-time money for ongoing budget expenses."
Sickles said national growth has slowed, with U.S. GDP growing about 2% annualized and national job growth weak, and he highlighted inflation that rose to 3.8% in April largely because of transportation and fuel costs. He told the committee Virginia's unemployment rate has held near 3.8% while labor force participation has continued to decline to about 63.6%.
Why it matters: The surplus gives lawmakers flexibility amid a budget impasse, but Sickles and senators repeatedly warned that one-time balances should not mask structural gaps. Several members pressed whether the administration's expected reforecast will include legislative input as required by statute; Sickles said the administration would welcome legislative participation.
Committee members questioned potential budgetary fallout from recent federal action, including HR 1, which Sickles said could reduce hospital supplemental payments and shift costs. "We're going to need to take a serious look over time ... how we fund our hospitals," he said, noting federal changes could remove hundreds of millions previously used to support hospitals.
Data centers and incentives also featured in the discussion. Lawmakers asked whether removing tax incentives would jeopardize large planned investments. Sickles said some firms have told officials they would not proceed without tax abatements and cited private correspondence indicating the current legislative and political environment affects investment decisions.
What comes next: Sickles said he looks forward to the governor's reforecast for fiscal 2027 and 2028 and that the administration will continue to brief the legislature. The committee moved to questions from members after the presentation.
