Governor Bob McDonnell announced today that February revenue collections decreased by 2 percent over the prior year mainly due to one fewer deposit day. February is not generally a significant month for revenue collections. On a year-to-date basis, total revenue collections rose 5.5 percent through February, ahead of the annual forecast of 3.6 percent growth.
The revenue decrease was primarily driven by withholding (-5.7 percent) and nonwitholding (-14.5 percent) collections. Sales tax revenues, which include the final post-holiday sales and gift card purchases, rose 10.3 percent in February. Adjusted for the accelerated sales tax program, total state revenues grew 5.1 percent through February, slightly ahead of the forecast of 3.4 percent growth.
"While overall economic indicators continue a trend of progress and recovery, this month's decline in revenue reminds us that our future economic growth is still insecure and uncertain," said Governor McDonnell. "Virginia continues to fare better than neighboring states. Our unemployment rate is the lowest in the state in four years, the lowest in the Southeast, and the second-lowest east of the Mississippi. Virginia has added over 140,000 net new since February 2010. The increases in revenue and reductions in unemployment are signs that Virginia is emerging from the recession and that fiscally responsible management is making a positive impact on our economic recovery. However, with more than 236,000 Virginians still unemployed and the sequester threatening up to 200,000 additional jobs in Virginia, we have much more work to do to get Virginians back to work and to continue growing our economy.
"The unprecedented uncertainty created by the failure of Washington to make difficult choices to balance our budget and reduce our debt will inject new volatility into our tenuous economic recovery. Washington needs to follow the example we have set here in Virginia. We must make government smaller and more efficient, and focus our investments on core functions of government like higher education, economic development and transportation which help create the conditions conducive to private-sector job creation. We must continue to put in place policies that will free our job creators and entrepreneurs to innovate, create and grow, and provide them with the infrastructure they need to be successful in the years ahead. Maintaining fiscal responsibility in our state budget, and ensuring that we fund the core functions of government well, is necessary to ensure that this early recovery takes hold and is sustained for the long term."
The February revenue numbers are available at this link: http://www.finance.virginia.gov/KeyDocuments/RevenueReports/FY2012-2013/2013ReportsList.cfm