Virginia is reporting record tax revenues, but there’s a problem: The amount collected still isn’t high enough to pay the bills.
WASHINGTON — Virginia is reporting record tax revenues, but there’s a problem: The amount collected still isn’t high enough to pay the bills tallied in the most recent fiscal year’s budget.
Governor Terry McAuliffe said the state is in the hole by $266.3 million, after the $18 billion collected fell short of what had been forecast in the 2016 fiscal year budget. The money allocated represented a 3.2 percent growth in revenue, but the actual increase came in at 1.7 percent.
The main culprit stems from payroll tax and sales tax collections that fell short of expectations. In a statement, the governor’s office said payroll tax revenues fell short by 2.4 percent because the jobs that were created in the state were in lower-wage categories or were part-time jobs.
Sales tax revenues missed estimates by 1.9 percent. The wet spring impacted home construction and home furnishing. Internet sales are also blamed.
By law, Virginia has to re-estimate general fund revenues by Sept. 1, with any raises for state employees that were set to take place on Dec. 1 now put on hold until the shortfall is addressed.