McDonnell laments state revenue decline
Virginia Gov. Bob McDonnell announced in a press release Wednesday that February state general fund revenue collections were down 2 percent from January.
Although Virginia Secretary of Finance Richard Brown said in a letter February was not usually an important month for revenue collection, McDonnell said the numbers showed economic growth was insecure.
“The unprecedented uncertainty created by the failure of Washington to make difficult choices to balance our budget and reduce our debt will inject new volatility into our tenuous economic recovery,” McDonnell said in a statement. “We must make government smaller and more efficient.”
McDonnell said 236,000 people in Virginia were unemployed and the sequester — across-the-board cuts to federal defense and domestic spending — still remain a threat to the state.
Individual and corporate income tax revenues dropped off dramatically, according to Brown’s letter.
“Most national indicators suggest the economy is slowly improving,” Brown said in the letter. “However, political uncertainty, a weak global economy and weak consumer confidence remain threats.”
But the state has posted 5.5 percent year-to-date growth in the general fund, so Brown said the February numbers were not too problematic.
And McDonnell added that broad trends in unemployment numbers and specific revenue sectors, including sales tax revenue that increased 10.3 percent in February, pointed to a positive direction for Virginia. Another bright spot in February were the alcoholic beverage taxes, which posted a 6.8 percent increase.
Spokespersons for the Virginia Senate Democrats and the Virginia Democratic Party declined to comment on McDonnell’s interpretation of the revenue decline.