RICHMOND, Va. (WRIC) — A revenue report issued by Virginia’s Secretary of Finance, K. Joseph Flores, shows the commonwealth’s finances are so far exceeding expectations for fiscal year 2022.
Data showed that collections in August were 18.9 percent above where they were last year – reflecting increased income taxes from higher employment and sales taxes from re-opened businesses.
According to the letter, August isn’t normally considered a “significant month for revenue collections” because the only taxes the state collects are those that involve ongoing collection efforts – such as withheld income tax and sales tax. But those can also act as indicators of overall economic health.
Since the start of the fiscal year, which begins on July 1, the state has seen a 5.2 percent increase in revenue – well above the 8 percent annual decline predicted at the beginning of the budget cycle.
But Flores cautioned that the state won’t have a more complete picture until September’s report, when quarterly payments from individuals and corporations will arrive. And he pointed out that the latest surge in COVID cases has already “slowed growth in the labor market and dampened consumer confidence.”
Counting Federal Funds
One chunk of cash that won’t be counted in any monthly report: $4.3 billion in American Rescue Plan funding.
That money came directly from the federal government after President Joe Biden’s pandemic recovery funding was approved by congress earlier this year. The funds were earmarked separately from the normal budget in a special budget session held earlier this year.
Of that $4.3 billion, just under $3.4 billion was allocated immediately, with the remainder remaining available to the General Assembly when they reconvene in January. Check out a breakdown of where that funding is going below: