August General Fund Revenues Exceed Forecast Released

Governor Glenn Youngkin today announced that general fund revenues are ahead of forecast by $204.8 million year-to-date. Among the major sources, general fund revenues are up 3.0 percent year-to-date after adjusting for policy actions. Compared to August 2022, adjusted general fund revenues demonstrate a strong economic position for Virginia.  

“As we accelerate results in the commonwealth to reduce cost of living and provide transformational investments in our communities, Virginia remains in a strong economic position,” said Governor Glenn Youngkin. “We're encouraged by the results early in this fiscal year and continue to remain intentionally conservative in our forecast to provide an added buffer as we prepare the Commonwealth for future investments and any potential economic downturn in the future.”   

“For the first two months of the fiscal year, collections are ahead of revenue projections assumed in the recently enacted budget, however it is too early to draw conclusions about full-year revenue collections,” said Secretary of Finance Stephen Cummings. “While the economy continues to show resilience even as interest rates have increased significantly over the past year, the risk of further rate hikes, inflation persisting above Fed targets, and other uncertainties including the potential for a federal government shutdown, cause us to remain cautious in our outlook over the near term. The next two months will provide a better indication of Fiscal Year 2024 revenue trends.”  

In Virginia, the unemployment rate fell to 2.5 percent on a seasonally adjusted basis in July and the labor force participation rate increased to 66.7 percent in July – the highest labor force participation rate since November 2012. The number of employed Virginia residents increased by 17,937 to 4,481,008 in July.  

Among the major revenue sources, withholding and sales tax collections are generally in line or ahead of projections, while corporate income tax revenues exceed forecast.   

August is not a significant month for revenue collections, however, with collections mainly from withholding, sales taxes, and other sources that have regular monthly payments. 

The full August 2023 revenue report is available here.  

Virginia General Assembly Adopts Budget Revisions

The Virginia General Assembly convened in Special Session today to address revisions to the 2022-2024 Biennium Budget (HB 6001/SB 6001). Key provisions of the 2022-2024 Biennium Budget revisions pertaining to K-12 education are: 

• Increases state support for public education funding by $645.3 million.
• Provides $418.3 million General Fund (GF) in flexible one-time payments available for use through Fiscal Year (FY) 2026.
• Provides $54.6 million GF for the state share of a 2% salary increase for SOQ funded positions, effective January 1, 2024.
• Includes $152.3 million GF to fund additional support positions and amends ratio from 21 positions per 1,000 ADM to 24 positions per 1,000 ADM.
• Establishes legislative workgroup to review and prioritize JLARC recommendations and develop long-range implementation plan due to the General Assembly by November 1, 2024.
• Provides $20 million ($12.0 million GF & $8.0 million ARPASLFRF) for targeted flexible grants to support school security.
• Provides $6.7 million Non-General Fund (NGF) (ESSER) to support expansion of the Virginia Literacy Act to include grades 4-8. 

To review FY 2024 K-12 School Division Distribution Tables, click here. 

To review the budget presentation provided by House Appropriations staff, click here. 

To review the budget presentation provided by Senate Finance and Appropriations staff, click here. 

VSBA encourages you to consult your division administration and finance staff as to how the revisions to the biennial budget will impact your local operating budgets.