Year-over-year, Virginia general fund revenues declined by 8.2 percent in April and are down 0.9 percent fiscal year-to-date.
Article continues below
The decline was mainly due to a 9.4 percent drop in volatile non-withholding revenues that are associated with capital gains realizations.
The April decline, however, was less than anticipated.
Overall, in comparison to the updated December forecast (“the Forecastâ€), unadjusted general fund revenues are ahead of forecast by $497.4 million year-to-date, and ahead of revenues assumed in the amended 2022 Appropriation Act by $1.8 billion year-to-date.
Throughout the remainder of this memorandum, all revenue comparisons will be with the updated Forecast.
Adjusting for policy actions and timing issues to better reflect underlying economic trends, general fund revenues were 2.7 percent higher in the first ten months of Fiscal Year 2023, compared to the same period of the previous year.
For April, adjusted general fund revenues fell by 14.6 percent compared to April 2022.
April is the most significant revenue collection month in the fiscal year.
In addition to the typical withholding and sales tax collections, final and estimated payments for individuals, insurance companies, and most corporations are remitted.
April also marks the peak month for individual income tax refund processing.
This year was also the first year of final collections for the new Pass-Through Entity Tax (PTET).
Revenues from non-withheld income are running well ahead of forecast.
For April, nonwithholding fell by a relatively small 9.4 percent.
This was partly due to timing issues.
Since the PTET filing deadline of April 17 preceded the income tax filing deadline of May 1, some of the revenues that would typically have been received in May were shifted into April.
Early indications are that May non-withholding collections, while lower than last year, are better than anticipated.
Offsetting some of the strength in non-withholding, refunds totaled $688 million in April, about $113 million higher than anticipated in the Forecast. ■