Virginia General Fund Revenues Lag In September | WAMU 88.5 - American University Radio

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Virginia General Fund Revenues Lag In September

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Falling tax revenues in Virginia are lagging behind the forecasts used to craft the state's two-year spending plan, and Finance Secretary Ric Brown believes the uncertainty surrounding federal spending may be creating a drag on economic activity.

Revenues fell 0.7 percent in September, the third monthly decline in four months. Overall, general fund revenues for the first fiscal quarter are 1.3 percent higher than at this point last year — but that's below the forecast of 2.9 percent growth. 

While individual income revenues barely increased, sales tax collections rose by 10.4 percent. But corporate income taxes were way below the forecast,  falling by 17.7 percent, Brown said. Large companies accounted for much of that.

"Retail sales and 'other' were the big negatives. I also should say probably energy. It was minus 11.5 percent," Brown said. "When you look at what's included in that  other category, 50 percent of it basically falls in tobacco, financial activities, and telecommunications."

Uncertainty over federal policies is due to potential sequestration and to business worries over a proposed capital gains tax increase in January, Brown said. 

The Governor's Advisory Council will meet next month to reassess the revenue forecast. 

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