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A look at the economy and business outlook in Virginia.

Secretary of Finance: Budget Surplus Could be Close to $2 Billion

A white sign with green letters reads "We're Hiring." A bus in the background is parked outside a strip mall with a Publix Grocery store
Steve Helber
/
AP Photo

Virginia should see a budget surplus as high as $2 billion, the Secretary of Finance told the House of Delegates’ Appropriations Committee Wednesday, but much of the money would have to be deposited into legally required funds.

Secretary of Finance Aubrey Layne peppered the House Appropriations committee with encouraging news Wednesday, covering corporate income taxes, retail sales, and other collections

“What this all means is that we're going to have a significant surplus,” Layne said. “It's going to be between 1.5 and $2 billion and I expect it to be closer to the $2 billion [figure].”

But a $2 billion surplus doesn’t mean the General Assembly can spend all of that money. The law requires that close to half goes into the state’s rainy day fund, and other laws require deposits into the Water Quality Improvement Fund.

A number of signs point to Virginia’s economy improving as the coronavirus pandemic appears to abate. The unemployment rate fell in May to 4.5%.

But a key question is how the recovery will be felt across economic sectors and regions. Since April last year Northern Virginia’s employment increased by 8.2%, but the labor market in the Richmond-Petersburg area rose by only 5.2%

COVID relief money will get divvied up in a special session that begins on August 2nd. Whatever’s left from the surplus will be allocated in next year’s legislative session during the budget process.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.