State tax revenue fell 21 percent in April

By: Tyler Whitley | Times-Dispatch
Published: May 12, 2009

April tax revenues in Virginia fell 21.3 percent, primarily due to a record drop in individual estimated and final payments due May 1.

Confirming the gloomy revenue projections that Gov. Timothy M. Kaine announced Monday, Secretary of Finance Richard D. Brown told the House Appropriations Committee today that all major sources of revenue were down in April.

Total revenue on a year-to-date basis fell 8.8 percent, the largest drop on record, Brown said. The budget is based on a projected 7.3 percent decline.

Sales tax collections declined 10 percent from last April, Brown said.

He also said tax refunds surged 21 percent in April. There was an 11 percent increase in refunds processed and the average check was up 10 percent, he said.

Kaine has directed state agencies to make further cuts in expenditures because of the falling tax revenues.

Reviewing the status of the Obama administration's $787 billion economic stimulus package, Barbara Reese, deputy director of policy for the state, said the $4.8 billion scheduled for Virginia has begun coming into Virginia. To date, the benefits have helped preserve jobs rather than create new ones, she added.

Reese said increased food-stamp benefits and a tax reduction that began in April could spur sales-tax growth in future months.

Secretary of Transportation Pierce Homer said stimulus money being used to repave roads will keep some small and medium-sized paving contractors in business, preserving know-how that would have disappeared.

He urged the lawmakers to keep the pressure on Washington to get money for a high-speed rail line between Richmond and Washington.

Homer disclosed that the Commonwealth Transportation Board has added $10 million to the budget for engineering studies on revamping Acca Yard in Richmond and Henrico.

The yard is a major railroad point for trains going north-south and east-west, he said. The cost of rebuilding the yard will be enormous, Homer added, likening it to the Springfield interchange in Northern Virginia.