State revenue up in April
RICHMOND, Virginia – Governor Glenn Youngkin announced that revenue collected in April exceeded forecasts, increasing 45.7% from April 2021. General fund revenue was approximately $1.9 billion higher since the start of the year to the revised mid-term forecast published in February. Total revenue collected rose 19.0% through April, well ahead of the revised annual forecast of 9.2% growth.
“Virginia’s economy continues to show encouraging signs of growth. We are increasing jobs, increasing paychecks and more and more people are joining the workforce,” said Governor Youngkin. “This report confirms the projected strong trajectory for government revenues and we continue to see growing evidence that now is the time to cut taxes. Inflation is stealing more money from people’s paychecks. Hardworking Virginians paying near record prices at the pumps and we know there is plenty of money in the system to cut taxes and lower the cost of living in the Commonwealth.
“Much of the extraordinary year-over-year growth in non-withholding collections in April is due to the change in the federal tax filing date to April 2022 from May 2021,” said Finance Secretary Stephen Cummings. “We will have to look at the combined results for April and May versus last year to see general trends in this category. However, general revenue categories not affected by this timing difference, primarily withholding taxes on wages and sales tax collections continued their strong growth over the previous year, and this trend reflects rising employment, consumer activity and inflation.
In percentage terms, withholding taxes and sales taxes rose 4.8% and 8.4% respectively in April. Year-to-date, withholding revenue is up 9.5%, ahead of the expected full-year growth rate of 9.0%, and sales tax collections are up up 14.4%, ahead of the annual forecast of 11.4%.
Continued revenue growth is supported by a stable economy as well as the recent improvement in job growth. From January to March, the number of employed Virginians increased by 42,000, ranking Virginia 14th among states for job growth during that period. Virginia’s labor force participation rate has improved slightly, but Virginia’s decline in labor force participation since the start of the pandemic remains among the worst in the nation. Despite strong recent performance, more work is needed in this area as Virginia has yet to recover more than 170,000 jobs lost during the pandemic and ranks 47th in jobs recovered since the pandemic.
The full April 2022 earnings report is available here.