With state revenue projections north of $5 billion, Virginia Governor Glenn Youngkin (R) renewed his call for a budget deal with Senate Democrats as negotiators with the Virginia General Assembly met for the first time since June.
“Virginians remain overtaxed. Last year we provided $4 billion of tax relief for individuals, families and veterans. What this year’s preliminary numbers tell us is that even after that historic tax package the Commonwealth ended fiscal year 2023 with $5.1 billion in excess resources, far more than forecasted,” said Governor Glenn Youngkin.
“There is plenty of money in the system to fund our shared priorities of education, behavioral health and law enforcement while returning more of Virginians hard-earned dollars back to their wallets. Just as we did last year, I am calling on the General Assembly to reject the partisan, business-as-usual approach in Richmond, and agree on a deal that lowers the cost of living and cost of doing business in Virginia while investing in our shared priorities. This is not about Republicans and Democrats. It’s not about the Senate or the House. It’s about delivering for Virginians.”
Already, Virginia is returning some $1 billion to small businesses, with Secretary of Finance Steve Cummings confirming Friday that the state expects to return “something more than a billion” dollars to taxpayers who had taken advantage of a new tax benefit for pass-through entities, such as limited liabilities and other unincorporated businesses, that allows them to avoid a $10,000 cap on federal income tax deductions for state and local taxes.
Meanwhile, Virginia’s unemployment numbers are looking better and better, as proximity to Washington D.C. have eased the blow of the COVID-19 pandemic and the state economy continues to gain ground despite federal inflation pressures.
Senate Democrats continue to announce their “blue brick wall” in opposition to any form of tax relief spearheaded by Virginia Republicans.
Other notes on the state of the Virginia economy include:
- Sales tax collections increased 3.9 percent as compared to the annual forecast of a 1.3 percent decline.
- Payroll withholding grew 4.0 percent, exceeding the forecast of a 0.1 percent decline.
- Corporate income tax collections grew 2.6 percent compared to the official estimate of a 12.2 percent decline.
A complete accounting of all final revenue sources will be available after final year-end close and will be released on August 23rd when the Governor speaks at the Joint Money Committee Meeting.