On Friday, October 16, the General Assembly’s Special Session went into recess. It did not adjourn. This allows the Governor to modify the budget to enact the redistricting constitutional amendment on November’s ballot if it passes.
Since our September legislative update, Del. Guzman’s (D-Woodbridge) paid quarantine leave (HB 5116) bill failed in the Senate Committee Commerce and Labor by a 14-1 vote. The two bills (SB 5067 – Saslaw and HB 5074 – Sullivan) that would provide businesses immunity from civil claims related to the transmission of or exposure to COVID-19 were stricken by their respective patrons after the inability to have labor and business groups reach an agreement. Lastly, Sen. Lewis’ (D-Accomac) bill (SB 5106) that would extend local land use approvals to address the pandemic has passed the House and Senate and awaiting the signature of the Governor.
Virginia Releases September 2020 Revenue Report
as reported from the Office of the Governor
Governor Ralph Northam announced that September General Fund revenue increased 7.6 percent from the previous year, driven by growth in payroll withholding, corporate, and recordation tax collections. The Governor reported that Virginia’s General Fund revenues are increasing, and the Commonwealth has been able to avoid the major revenue shocks that other states are experiencing because of the ongoing pandemic. This is the result of the proactive measures Virginia has taken to mitigate the impacts of the virus on the state’s economy and put the Commonwealth on the path toward a strong recovery.
With September marking the end of the first quarter of fiscal year 2021, Secretary of Finance Aubrey Layne, reported this quarter’s revenue performance confirms that the Commonwealth took a measured and prudent path in the updated Interim Forecast released in August.
With one more deposit day than September of last year, payroll withholding grew 11.4 percent for the month. Furthermore, the first non-withholding estimated payment for fiscal year 2021 was due in September. Collections in non-withholding grew 2.4 percent over last year. Collections of sales and use taxes, reflecting August sales, fell 3.2 percent in September—almost all of the decline is due to accelerated sales tax (AST) refunds. As with non-withholding, the due date for the first estimated payment for corporate income tax collections for the fiscal year was also due in September. Collections of corporate income tax increased 17.4 percent in September from September of last year. Finally, collections of wills, suits, deeds, and contracts—mainly recordation tax collections—were $56.6 million in September, compared with $36.6 million in September of last year.
On a fiscal year-to-date basis, total revenue collections rose 9.9 percent, well ahead of the annual forecast of a 1.8 percent decrease. On a fiscal year-to-date basis, collections of payroll withholding taxes—63 percent of General Fund revenues—increased 2.4 percent, equal to the annual estimate. Year-to-date non-withholding collections were $982.4 million compared with $617.6 million in the same period last year, increasing by 59.1 percent, ahead of the annual estimate of a 3.6 percent decline. Sales tax collections—16 percent of General Fund revenues—increased 7.5 percent through September, ahead of the annual forecast calling for a 9.7 percent decrease. Through the first quarter of the fiscal year, corporate income tax collections rose 36.1 percent from the same period last year, ahead of the annual estimate of a 3.0 percent increase. Finally, collections of wills, suits, deeds, and contracts were up 35.9 percent in the first quarter, well ahead of the forecasted 12.6 percent decline.
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