WASHINGTON — Virginia’s new fiscal year begins next month, and revenue collections this fiscal year continue to trail expectations.
So far in this fiscal year, total revenue collections — including payroll withholding and sales taxes — are up 1.9 percent from this date last fiscal year, which is behind the annual forecast of 3.2 percent growth.
Payroll withholding taxes, which account for 63 percent of Virginia’s General Fund revenues, are up 2.5 percent, behind the annual forecast of 4.1 percent.
“As we near the end of the fiscal year, my team is working to mitigate any potential revenue shortfall by asking state agencies to conserve discretionary funds and implement budget strategies to save money in June for use in the next biennial budget,” Gov. Terry McAuliffe said in a statement.
Virginia’s new two-year budget begins July 1. But if revenue collections this fiscal year come in below the annual forecast, the state may be required to issue new revenue forecasts for the next budget cycle.
May is an important month for tax collections, because it includes additional tax revenue such as estimated and final payments for individuals. May revenue collections were up 6.4 percent from the previous year.
Year-to-date sales tax collections also trail budget projections.