Virginia Reaps Benefits of Budget Surplus

Jun 24, 2015

After facing a $439-million shortfall at the end of the last state fiscal year, the Commonwealth is poised to reap the benefits of an improving economy with a multi-million-dollar budget surplus. State employees, college faculty, teachers, and State Police troopers also stand to gain.

Finance Secretary Ric Brown addresses the Senate Finance Committee
Credit Anne Marie Morgan

Finance Secretary Ric Brown said annual revenues have grown by 7.3%—ahead of the 4.7% forecast. 

“If that were to continue—that variance—through June 30th, it’s worth about $427 million dollars.”

Income tax collections rose by 8.7%.  However, sales taxes—a major source of revenue—are lagging behind the forecast.  Senate Finance Committee chair Walter Stosch suggested that it’s a growing trend because many young consumers—and others—buy on-line and do not pay sales taxes.

“Some people use the on-line sales because they view it as a way of getting a sales tax discount. I mean, you know and we know that they’re obligated to pay the sales tax whether they buy it on the Internet or not, but the truth is they do not.”

Brown later said the lack of a deficit will trigger another budget provision that will cheer state workers.

“That is the contingency to move forward with the pay increases in August, so the pay increases would be likely if that happens.”

Many will receive a two percent raise.  Those with at least five years of service will get another $65 per year.