Virginia closed out fiscal 2021 with an historic $2.6 billion surplus, the largest recorded in state history, Gov. Ralph Northam said Wednesday.
Total revenue collections were up 14.5% over fiscal year 2020, according to preliminary figures, far ahead of the 2.7% growth that had been forecast. Total revenue collections hit $8.6 billion in the fourth quarter of fiscal 2021.
“Fueled by a surging economy, federal American Rescue Plan funds, and the largest surplus in Virginia history, we have significant resources available to make transformational investments in this commonwealth,” Northam said in a release.
All major general fund revenue sources exceeded their forecasts for the fiscal year.
Payroll withholding and sales tax collections finished ahead of forecasts by 3.3%, or $560.2 million. These taxes make up 80% of the total revenue and are seen as the best indicator of current economic activity.
Between April and June, collections surged 26.4%. However, due to the extension of the individual income tax filing deadline from mid-April to mid-May, June revenues fell 5.8%, or $180.8 million, compared to the same period in the prior fiscal year.
“We expected a strong revenue performance and this surplus is even larger than initially anticipated,” said Secretary of Finance Joe Flores. “We are encouraged that for the fiscal year, payroll withholding and retail sales taxes increased by 6.4% signifying that Virginia’s underlying economic foundation is strong.”
The state will release final figures for fiscal year 2021 on Aug. 18 at the Joint Money Committee meeting.
Earlier this week, Northam said Virginia had been named by
“Our efforts to foster greater diversity in business have resulted in a stronger and more vibrant economy that deserves such national recognition," said Michel Zajur, president and CEO of the Virginia Hispanic Chamber of Commerce.
With previous wins in 2007, 2009, 2011 and 2019, Virginia has now passed Texas as being the top state since CNBC began its ranking system in 2007.
“Virginia’s greatest asset is its workers, not only because of their talent and dedication but because of the diversity of experiences and perspectives that they bring to our economy,” said My Lan Tran, executive director at the Asian American Chamber of Commerce.
This year, CNBC adapted its formula to address the effects of the COVID-19 pandemic and its economic impacts, with a new focus on healthcare, sustainability and inclusiveness.
“We are thrilled to see that CNBC has acknowledged the critical importance of diversity to the strength and vibrancy of an economy and that Virginia has ranked highly in this area,” Sheila Dixon, executive director of the Northern Virginia Black Chamber of Commerce and Ervin Clarke, founder and chairman of the Central Virginia African American Chamber of Commerce, said in a statement.
