Governor Bob McDonnell announced that October revenue collections increased by 3.7% over the prior year. This is the seventh month out of the last eight in which state revenue collections exceeded the previous year's amount. The revenue increase was primarily driven by individual withholding (+4%) and sales tax (+6.5%) collections. Individual withholding is a significant budget driver, and the year to date increase of 4.3% is exceeding the officially forecasted growth of 2.4%. Adjusted for the accelerated sales tax program, total state revenues grew 3.6% through October, slightly lagging the economic-base forecast of 4.2% growth.
Speaking about the latest revenue report, Governor McDonnell noted, "We have now seen seven of the last eight months feature increases in revenue collections, and this has occurred in tandem with a slight decrease in our unemployment rate. Clearly, these are signs of a modest turnaround in Virginia's economy. Our unemployment rate is 6.8%, tied for the eighth lowest nationally and well below the national unemployment rate of 9.6%. We are second only to Texas in the number of net new jobs created since the beginning of the Administration. There is good news happening in Virginia, and that is a tribute to our small business owners, innovators and entrepreneurs who are working hard, taking risks, employing our citizens and helping set the path to economic recovery statewide. Government does not create prosperity, and it does not create jobs. What we can do in Richmond is put in place policies that make it easier for prosperity to be achieved and private sector jobs to be created. That is the focus of this Administration. However, this continues to be a very tough and uncertain economy, and far too many Virginians continue to be out of work. These pieces of good news do not erase the clouds of uncertainty that still hang over our economic landscape. Together, working across party lines, we must continue to identify and implement every possible policy that will spur economic growth and private-sector job creation."
The October revenue numbers are available at this link: