Virginia announces record surplus for fiscal year
Gov. Ralph Northam reported recently that Virginia reached the end of fiscal year 2021 with an historic $2.6 billion surplus, the largest in the commonwealth’s history. Total revenue collections soared 14.5% over fiscal year 2020, ahead of the forecast of 2.7% growth.
“We have effectively managed Virginia’s finances through the pandemic, and now we are seeing the results — record-breaking revenue gains, a recovery that has outpaced the nation and recognition as the best place to do business,” Northam said. “Fueled by a surging economy, federal American Rescue Plan funds and the largest surplus in Virginia history, we have significant resources available to make transformational investments in this commonwealth. I look forward to working with the General Assembly in the fall to seize this opportunity so we can build a brighter future for all Virginians. ”
All major general fund revenue sources exceeded their forecasts for the fiscal year. Individual non withholding taxes, one of the commonwealth’s most volatile revenue sources, accounted for about half of the surplus, although collections in payroll withholding, sales and corporate income taxes were also well above their respective forecasts.
Total revenue collections reached $8.6 billion in the final quarter of fiscal year 2021. In June, revenues decreased by $180.8 million, or 5.8%compared to the previous year, which can be attributed to the extension of the individual income tax filing deadline to May 17.
“We expected a strong revenue performance and this surplus is even larger than initially anticipated,” Secretary of Finance Joe Flores said. “We are encouraged that for the fiscal year, payroll withholding and retail sales taxes increased by 6.4% signifying that Virginia’s underlying economic foundation is strong.”
The commonwealth will release the final figures for fiscal year 2021 August 18 at the Joint Money Committee meeting.