Virginia finished the first quarter of the year with better-than-expected revenue growth, but Gov. Bob McDonnell remains concerned about the impact the partial federal government shutdown will have on state finances.
McDonnell’s administration announced today that September revenue collections increased by 2.6 percent over the same month last year. The state reported 2.8 percent growth for the first three months of the of the fiscal year, exceeding the official annual forecast of 1.5 percent growth. Individual and corporate income taxes fueled the September growth surge, administration officials said. Sales tax revenue, reflecting sales made in August, fell 2.7 percent.
In a statement release by his office, McDonnell said the state continues “to run well ahead of our forecasted fiscal growth for the year.” But McDonnell remains concerned about the impact the partial federal government shutdown in a state that has a large concentration of federal employees.
“Unfortunately, the efforts we’ve undertaken in Virginia to make government function better, and use limited state resources wisely to improve the quality of life of our citizens, are being undermined daily by the dysfunction in Washington D.C.,” McDonnell said. “The ongoing federal government shutdown will have a direct negative impact on state revenues in the months ahead, just as it is already having a direct, negative impact on Virginians in their daily lives. The success of our Commonwealth is being threatened by the ineptness of Washington. I continue to call on leaders in both parties to reopen the federal government immediately, and come together to find solutions to the challenges facing our great nation.”