BRADENTON, Fla. — A month after assuming office, Virginia Gov. Terry McAuliffe revealed measures to trim the biennial state budget due to lower-than-expected revenue projections.
McAuliffe briefed House and Senate budget committees Feb. 12 to review the preliminary mid-session revenue forecast and recommended $140 million in cuts.
Total general fund revenue collections fell 5.9% in January with declines in all major sources except corporate income tax. On a year-to-date basis, total revenue collections fell 0.5%, lagging the annual forecast of 1.7% growth.
Total revenues are tracking behind the forecast due to declines in individual withholding, non-withholding, and recordation taxes, he said. In January, receipts for individual non-withholding declined by 25.3% and withholding - the State's largest general fund revenue source - declined by 1.9%. Recordation tax collections declined by 33.3%.
The results are important because January is a significant month for revenue collections from individual estimated payments, sales taxes on December sales, and corporate income taxes from large retailers, state officials said.
"Although our underlying economic forecast has not changed, it is clear that the current revenue receipts warrant caution," McAuliffe said. "In order to remain prudent, we must adjust our revenue estimates downward, which will help reduce future risks."
He recommended reducing general fund revenue estimates for fiscal 2014 by $125 million and fiscal 2015 by $15 million.
General fund revenues are now expected to increase 1% percent in fiscal 2014 compared to the previous growth estimate of 1.7%.
McAuliffe proposed to address the lower revenue projections eliminating the fiscal 2016 estimated payment to the revenue stabilization fund, using additional lottery revenues, capturing uncommitted balances across the budget, and reducing the unappropriated balance from $51 million to $11 million.
A Democrat, McAuliffe took office Jan. 11 to serve the one term afforded governors in Virginia. He was chairman of the Democratic National Committee from 2001 to 2005.
