RICHMOND, Va. (WDVM) — Virginia Gov. Ralph Northam reported on Wednesday that the Commonwealth reached the end of fiscal year 2021 with a historic $2.6 billion surplus, the largest in the state’s history. According to the Governor’s office, total revenue collections soared 14.5% over fiscal year 2020, ahead of the forecast of 2.7% growth.
In a statement, 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.”
FY 2021 revenue data based on preliminary data is as follows:
- Total general fund revenue collections, excluding transfers, exceeded the official forecast (Chapter 552) by $2.6 billion (11.7% variance) in fiscal year 2021.
- The 30-year average general fund revenue forecast variance is 1.6%.
- Payroll withholding and sales tax collections, 80% of total revenues, and the best indicator of current economic activity in the Commonwealth, finished $560.2 million or 3.3% ahead of the forecast.
- Payroll withholding grew by 4.7%, exceeding the forecast of 2.7% growth.
- Sales tax collections increased 12.4% as compared to the annual forecast of 4.7%. Brick and mortar store sales increased 7.6% and internet sales increased 32.3%.
- Fourth quarter results show that payroll withholding and sales tax grew 12.5%.
- Non-withholding income tax collections finished the year ahead of expectations, up 37.1%. This was mainly due to a 68.0% increase in final payments to the Department of Taxation. Estimated payments increased 19.8%.
- Individual income tax refunds were a positive to the forecast as the average check size did not increase. Tax refunds were $339.4 million below expectations, a positive to the bottom line.
- Corporate income tax collections increased 49.8% for the year, ahead of the annual forecast of 27.4%. A preliminary analysis of the data reveal a broad based increase from larger corporations based on economic related growth.
The Commonwealth will release the completed data during the Joint Money Committee meeting on August 18.