(The Center Square) – Virginia’s general fund revenues increased by about 66.2% in May, which is the largest monthly increase in more than 50 years, but mostly attributed to changes in the tax filing schedule.
More than 85% of the growth was caused by the tax filing changes. Final payments on withholding and sales tax were due May 17. It's usually due May 1, but last year it was due June 1. The state also shortened the extension for individual final payments. May is usually a good month for revenue collection.
“Virginia’s economy is roaring back to life thanks to hard work following the science and one of the strongest pandemic responses in the country,” Gov. Ralph Northam said in a news release Friday afternoon. “New COVID-19 cases are at record lows, our vaccination rates are among the nation’s highest, and Virginians are heading back to work—and these record revenue gains are the result. Our responsible governance is paying off, and we will keep this up as we approach a new budget year and face major decisions about how to best use federal funding from the American Rescue Plan.”
Revenue collections from payroll withholding taxes increased by 4.4% on a year-to-date basis, which is above the 2.7% forecast. Sales and use taxes increased 11.1%, ahead of the 4.7% forecast. Total revenue collections increased 17.8%, which was far ahead of the forecasted 2.7% growth.
Along with the tax filing changes, Virginia has also gradually eased its COVID-19 restrictions on the economy over the past few months, which had been stunting growth. By the end of May, all social distancing and capacity rules ended. The mask mandate has also expired for most settings.
On Friday, Northam also announced the appointment of Joe Flores to be the Secretary of Finance and Carter Hutchinson to be the Deputy Secretary of Finance.
“We have a strong team with the right experience—Joe Flores is a highly-qualified, dedicated public servant with a deep understanding of the state budget and a strong background in fiscal policy, and I am confident our economic momentum will continue,” Notham said.
In a statement, Flores said he is grateful for the opportunity.
“We have a great deal of important work ahead of us in the coming months to manage the Commonwealth’s finances as we emerge from the pandemic and rebuild our economy,” Flores said. “I am grateful to Governor Northam for this opportunity and look forward to continuing to serve alongside our strong team in the Finance secretariat, including Deputy Secretary June Jennings and the leadership and staff at our agencies.”
Flores previously served as deputy secretary of finance under Northam.