Virginia revenues continue to slide

By Andy Jenks - bio | email
Posted by Terry Alexander - email

RICHMOND, VA (WWBT) - New numbers reflect a worsening budget situation in Virginia. The state continues to see revenues come in below expectations.

In the monthly update on Virginia's bank account, all eyes were on Richard Brown, Secretary of Finance and the news about Virginia's economy was not all that good.

"We will bottom out, but it's going to be slow growing," said Brown.

Brown told the house appropriations committee that general fund revenues were predicted to be down only 1.6% for the year. But Brown said the reality is they're now down 7.4% when compared with 2008.

"And our projections are negative in sales tax, too," he said.

Sales tax collections were predicted to be down just a fraction of a percent for 2009. The reality is they are down 5.9%.

"We're not looking for a bounce-up in those," Brown said.

That's meaningful, because Governor Tim Kaine will propose a revised budget for 2010 before the end of the year and if the numbers keep failing to meet the already low expectations - then more state budget cuts are virtually guaranteed. Local governments and school systems would also see their budgets affected.

"We are concerned that it looks like it's gonna be some reduction, but to what extent is still undetermined," said Kevin D. Smith, Finance for Henrico Public Schools.

There is at least one positive sign. Despite more than 1,200 state layoffs and many more in the private sector, Virginia saw a 4% growth in September payroll taxes. That beat expectations, but by itself, is not enough to stop the bleeding.

"The trend here is going in the right direction. We wish it were higher, no doubt, but it's on the right path," Brown said.

Also in a tight economy more people appear to be going after every tax break they can get. Virginia has processed about $150-million dollars in individual refunds this year. That's about 24-million dollars more than the state gave out to this point in 2008.

 (c) 2009. WWBT, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.