
Finance Secretary Cummings showed this chart to legislators this week and noted the deceleration in job growth, citing that as another reason he and Governor Glenn Youngkin remain cautious despite strong revenues. Click for larger view.
by Steve Haner
First published this morning by the Thomas Jefferson Institute for Public Policy.
Virginia’s state budget grew 90% in the past decade, far faster than in previous decades. After adjusting for inflation and population changes, spending still jumped 4% each year, a high rate of compound real growth. At the same time, the state continues to see explosive growth in its revenue, pointing to cash surpluses continuing for some time.
These facts emerged from two presentations to the Virginia General Assembly this week. The Joint Legislative Audit and Review Commission (JLARC) issued its annual report on state spending growth on Monday. That same day, Secretary of Finance Stephen Cummings reported on the revenue results from July through September, the first quarter of Fiscal Year 2024.
In just those three months, revenue exceeded the revenue estimates by more than $412 million. Other months, with larger pots of projected revenue, are still ahead. Should this revenue trend hold, surpluses similar to the historic surpluses of Fiscal Years 2022 and 2023 could result next June.
During the elections two years ago, Virginia’s flush financial condition was inspiring debates about tax reductions and tax reform. Some, but not all, of the proposals went on to pass. But with General Assembly elections just over two weeks away, few candidates in either party are promising more tax reform or reduction efforts in the next session. Continue reading →