The Shadow
RICHMOND, VA (VR) – Governor Glenn Youngkin announced that Fiscal Year 2025 general fund revenues exceeded the official forecast assumed in the 2025 Appropriation Act by $572.0 million. Total general fund revenues grew $1.78 billion (6.1%) over the prior fiscal year. Total general fund revenues for June, the final month of the fiscal year, were slightly ahead of projections, exceeding the forecast by $83.7 million (2.7%). Revenue for the month grew $212.6 million (7.2%) year-over-year. Preliminary accounting of these revenues completed on July 25.
“Virginia has never been in a stronger position financially,” said Governor Glenn Youngkin. “Virginia outperformed original projections for fiscal year 2025 by nearly $2.7 billion enabling us to provide $1 billion of additional tax relief, fully-fund Medicaid and other critical services, and continue our historic investments in K-12 education. The fiscal management of our administration has collectively led to four consecutive years of surplus revenues and unexpended balances of approximately $10 billion.”
“Since 2022, Virginia’s strong financial performance has enabled us to provide record investments and deliver $9 billion in tax relief to lower costs for Virginia families and businesses,” Gov. Youngkin continued. “Our historic investments in education, law enforcement, behavioral health and economic site development have positioned Virginia to compete and win more than $125 billion in capital commitments from companies who see their future here in the Commonwealth. This virtuous cycle of lower tax burdens, making strategic investments in critical areas and competing for historic economic development projects reinforces Virginia’s status as the premier destination for talent and investment.”
“Fiscal Year 2025 general fund collections finished the year $572 million above the Chapter 725 estimate and almost $1.8 billion above final FY24 collections,” said Secretary of Finance Stephen Cummings. “Economic conditions are generally aligned with our prudent forecast for the fourth quarter of FY25 and into FY26. When combined with the approximately $900.5 million in bottom-line unappropriated balances resulting from the Governor’s actions in May, the Commonwealth has a cash position of almost $1.5 billion heading into the revenue forecasting and budget development process that will culminate with the outgoing budget that he will introduce in December.”
Analysis of Fiscal Year 2025 Revenues
Based on Preliminary Data
- Fiscal Year 2025 revenues exceeded the Chapter 725 forecast by $572.0 million (1.9%) and were $1.78 billion (6.1%) higher compared to Fiscal Year 2024 collections.
- Actual FY25 general fund collections of $31.2 billion exceed the original FY25 official forecast (Chapter 2, Acts of Assembly, 2024 Special Session I) by $2.67 billion (9.3%).
- Higher than expected revenue collections are primarily attributable to strong individual income tax nonwithholding revenues which were partially offset by higher than anticipated individual income tax refunds.
- Net individual income tax collections were $334.3 million (1.6%) ahead of forecast and $1.58 billion (7.8%) above prior year collections.
- Payroll withholding grew by $842.9 million (5.0%) over last year but fell short of the forecast by just $19.6 million (-0.1%).
- Sales tax collections finished the year slightly ahead of forecast by $14.8 million (0.3%) and up $103.1 million (2.2%) compared to last year.
- Net corporate income tax collections were $87.1 million (4.9%) above forecast.
- A complete accounting of all final revenue sources will be released on August 14th when the Governor speaks at the Joint Money Committee Meeting.
