General Fund Revenue Collections Increased 7.8% in March
~Solid Gains Occurred in Individual Nonwithholding, Corporate Income Tax and the Insurance Premiums Tax~
RICHMOND- Governor McAuliffe announced today that general fund revenue collections increased 7.8 percent in March, with solid gains in individual nonwithholding, corporate income tax and the insurance premiums tax. On a year-to-date basis, total revenue collections were flat through March, lagging the annual forecast of 1.0 percent growth.
Speaking about this news, Governor McAuliffe noted that March is not a significant month for revenue collections, in general. However, he added “March revenues reverse the negatives of the last two months and have us now moving in the right direction. From the very beginning of our budget deliberations, all involved have assumed that general fund revenue collections in the last quarter of fiscal year 2014, especially estimated and final payments of individual income taxes, would be key for the Commonwealth. The revenue data for March, being released today, represent a step in the right direction toward realizing our budget estimates. Longer term, we must continue to place a priority on creating jobs and diversifying our economy. This is my highest objective and I will work diligently toward that end.”
Collections of payroll withholding taxes grew 0.8 percent in March. Although not a significant month for individual nonwithholding and corporate income tax collections, these sources increased respectively by 17.7 percent and 35.1 percent. Final payments from insurance companies for tax year 2013 were due in March. The insurance premiums tax totaled $31.6 million and increased by 126.5 percent. Collections of sales and use taxes, reflecting February sales, fell 4.2 percent in March – the weakness is due in part to the weather. Finally, recordation taxes from real estate transactions were down 29.9 percent as severe winter weather dampened home sales.
Collections of payroll withholding taxes – 63 percent of General Fund revenues -- increased 2.7 percent through March, slightly behind the annual forecast of 2.9 percent growth. Sales tax collections - 18 percent of General Fund revenues – have declined 4.8 percent through March, trailing the annual forecast calling for a 4.4 percent decline. Adjusting for the accelerated sales tax program and the 0.125 percent sales tax transfer required by the provisions of HB 2313, total revenues grew 1.1 percent through March, trailing the adjusted forecast of 2.1 percent growth.