General Fund Revenues Remain in Line with Forecasts Through October

Commonwealth of Virginia

Glenn Youngkin, governor of Virginia, speaks prior to signing executive actions in the Virginia State Capitol in Richmond, Virginia, U.S., on Saturday, Jan. 15, 2022. Youngkin, former co-CEO of the Carlyle Group Inc., is the first Republican elected to the office since 2009. Photographer: Al Drago/Bloomberg

Office of Governor Glenn Youngkin

RICHMOND, VA — Governor Glenn Youngkin today announced that general fund revenues for October 2023 remain in line with updated revisions to the official revenue forecast. Year-to-date through October 31, general fund revenues are up 12.1 percent over the prior year. The year-over-year increase is driven largely by elevated non-withholding collections and lower-than-expected individual income tax refunds related to the elective Pass-Through Entity Tax (PTET), while other major revenue sources were generally in line with expectations.  

“Our prudent forecast for this fiscal year appropriately reflected the economic risks on the horizon,” said Governor Glenn Youngkin. “While we are slightly ahead of plan, year-to-date performance reinforces that we must remain measured as decisions at the federal level continue to drive inflation. We must continue our efforts to address the cost of living for all Virginians and drive job growth across the Commonwealth.”  

“While PTET-related collections and refunds continue to distort overall revenue collections, underlying revenue growth in our major revenue sources such as payroll withholding and sales tax is roughly on plan,” said Secretary of Finance Stephen Cummings. “We are confident in our conservative revenue forecast that reflects moderating revenue growth over the balance of the fiscal year, and we are carefully watching a number of economic headwinds, including the possibility of a federal government shutdown, persistently high interest rates, and spillover effects from the military operations in Gaza and the economic slowdown in China. Given these downside risks, we will maintain a cautious outlook going forward.” 

Among the major revenue sources, payroll withholding taxes were 2.6 percent higher for the month on an unadjusted basis and up 1.0 percent year-to-date through October. Sales tax collections are 0.3 percent higher year-to-date, and corporate income tax revenues are up 24.4 percent year-to-date.  

Adjusting for policy and excluding PTET-related refunds to better reflect underlying economic growth, total general fund revenues decreased 5.3 percent year-over-year in October and are up 1.8 percent year-to-date. For the full fiscal year, the official revenue forecast anticipates a year-over-year decline in general fund revenues of 5.5 percent, including the impact of various tax policy actions adopted in 2022 and 2023, and reflecting the potential for an economic slowdown in the latter part of the current fiscal year.  

The full October 2023 revenue report is available here.