State revenue collections increased 3.9 percent in September, making it the 18th month out of the past 19 in which collections exceeded the previous year's.
Individual nonwithholding tax payments as well as sales and corporate income taxes contributed to the increase in September — the month when estimated payments from individuals, corporations and insurance programs are due in addition to regular monthly collections.
Despite the uptick, Gov. Bob McDonnell struck a note of caution in light of the national economic situation.
"While Virginia's economy continues its trend of growth this month, all indicators at the state and national level highlight the need for caution in forecasting and budgeting as our economy struggles to regain its footing," McDonnell said.
"Virginia's economy continues to show modest growth and signs of improvement that surpass those of the nation's economy as a whole, but the fragile national economy, persistent uncertainty regarding federal funding decisions and our economy's vulnerability to upheaval due to national and world events prompts economists and elected officials to take a cautious, conservative fiscal approach."
Individual nonwithholding tax payments rose 17.3 percent last month, and sales and use taxes rose 5.8 percent.
On the flip side, collections of individual income-tax withholding — which make up 64 percent of general fund revenues — dropped by 3.7 percent. Secretary of Finance Richard "Ric" Brown wrote in a memo to the governor that last month had one fewer deposit day compared with September of last year.
So far this year, total revenue collections have risen 6.7 percent, ahead of the revised annual forecast of 3.7 percent growth.
"Adjusting for the accelerated sales-tax program, total revenues grew 5.6 percent through September, ahead of the adjusted forecast of 3.5 percent growth," Brown wrote.
The revenue report came the same day McDonnell conferred with economists to help him better gauge the financial outlook for the state.
The governor is crafting the first-two year budget of his administration, and he called into a meeting of the Joint Advisory Board of Economists, a group that reviews the state's economic assumptions.
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