Virginia tax collections reflect struggling economy
TIMES-DISPATCH/THE ASSOCIATED PRESS
Virginians are earning less and spending less, and business profits have risen sharply, likely due to cost-cutting measures.
Related Info
JOBLESS RECOVERY PDF: A new report says Virginians are earning less and businesses are hiring less.
How we’re feeling
Tax collections show how much we drove, bet and drank in October, too.Fuel taxes: $73.1 million, up 3.4 percent from a year ago
Lottery revenue: $119.0 million, up 13.2 percent
Beer and wine excise taxes: $3.9 million, up 2.7 percent
SOURCE: Secretary of finance revenue report
Tax collections
What we paid the state in taxes last month gives an early signal to how the economy is faring.Personal income taxes: $740.2 million, down 8.2 percent from a year ago
Sales taxes deposited*: $237.9 million, down 5.4 percent
Corporate income taxes: $36.9 million, up 68.7 percent
Vehicle license fees: $18.7 million, down 5.4 percent
*Sales-tax deposits by retailers are from taxes paid by consumers in September.
SOURCE: Secretary of finance revenue report
RICHMOND, Va. -- Virginians are taking home less pay, spending less in stores and still are getting hit on their investments, new state tax-collection statistics show.
Business profits are up sharply, the statistics show, but economists say that with retail sales lagging, when that will translate into new hiring and investment is unclear.
"It really looks like a jobless recovery," said Carl M. Colonna, an economics consultant and retired economics professor at Christopher Newport University.
State tax-collection data compiled for the secretary of finance's monthly revenue report show the money withheld from Virginians' pay checks, a rough tally of wages, fell sharply in October from last year's depressed level when the sluggish national economy was knocked into a tailspin by the meltdown of the financial markets.
The 8 percent drop is far more than the 3 percent decline in the number of jobs in the state.
"That means there's a lot of underemployment," Colonna said.
It may reflect shorter hours, furloughs, pay cuts, or people who have lost jobs finding new ones at lower pay, he said.
"I'm not at all convinced we're out of the woods," said David Garraty, an economics professor at Virginia Wesleyan College.
"I just don't see a lot of green shoots out there," he said. "It feels like it's going to be a long, slow climb."
Roy Pearson, Chancellor Professor Emeritus of Business at the College of William and Mary, said the decline in income reflects fewer jobs and a shift in the mix of jobs here.
There are relatively fewer jobs in high-paying areas such as construction, manufacturing and professional services than is usual in Virginia, he said.
Virginians aren't doing well with other ways of making money either, whether through investments, farming or other small-business activities.
Their payments of estimated income taxes -- the sums people are supposed to pay if withholding isn't likely to cover all their tax bills -- are down 24.8 percent this year, the tax-collection figures show.
At the same time, the state is writing big tax-refund checks, mainly because wealthy Virginians who filed state tax returns under extensions from the May 1 due date had been hit hard by last year's financial market meltdown, Secretary of Finance Richard D. Brown reported.
Those filers had deposited estimated taxes last year then ended up being more than they really owed, once they counted up investment losses. When their returns came in, the state found it owed them money. October refunds were up 45.3 percent from last year's level.
The state's corporations are doing better, however.
Though profits were down much of the year, reducing collection of corporate income taxes, October saw a 68.7 percent jump from last year's level, the tax-collection report showed.
Colonna said much of that rise in profits reflects cost-cutting -- including the layoffs that made Virginia's and the nation's jobless rates soar -- rather than increased revenues.
"But if you keep cutting faster than sales fall, it's not clear how long you can continue," he said.
And sales, at least in Virginia, still lag.
October collections of sales tax, which reflect sales made in September, were down 5.4 percent from the year before.
Richmond and its suburbs fared worse than the state as a whole with the city seeing a 14.4 percent decline in taxable sales, Henrico County an 11.6 percent decline, Hanover County a 10.5 percent decline and Chesterfield County a 9 percent decline.
In the Tri-Cities, where local leaders say the expansion of Fort Lee promises long-term gains in business activity, sales were more vibrant.
Hopewell posted an 18 percent increase in sales-tax collections and Petersburg a 4 percent increase. Colonial Heights, which has the most retail sales in the Tri-Cities, saw a 1.8 percent decline in tax collections.
"The consumer needs to step up to the plate," Colonna said. "But they're not going to until more people start finding jobs."
Contact David Ress at (804) 649-6051 or
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Reader Reactions
DandyAndy…I second what mrcs says.
I agree with and understand what you’re saying.
As one who has faced the impossiblity of trying to make someone understand my point when their entire objective is to ridicule my opinion and change the subject, I feel your frustration.
I also find it ironic, if not moronic, that some of these people will parse, scrutinize, and fact check your every point and then try to dispute it with a link from thedailykos or my favorite open-forum source, wikipedia.
But let Obama say he’s going to provide EVERYONE healthcare, increase the size of yet another goverment entitlement program and at the same time lower costs AND the deficit they take it on face value.They don’t even question the math.
When Obama says that bowing to foriegn leaders AND aquiescing to our enemies give us more credibility around the world, they fall for it hook line and sinker.
Those N.Korean and Iranian missiles are celebratory in nature I suppose, kinda like fireworks.
But let Sarah Palin write a book and the AP has fact checkers coming out of the woodwork to question or destroy her credibility.Did they EVER fact check a Bill or Hillary book.How about fact checking Obama’s two so-called biographies, How about verifying that Obama actually wrote his own biographies for a change.
But that won’t happen, Dandy.You and I know it.
It’s the same double standard that we see here on these threads everyday.
So consider an insult from some of these guys a compliment!
And like I’ve said many times,the DEBATE is what its all about.
Keep it up, DandyAndy.Never surrender!
DandyAndy,
You make perfect sense. I clearly understand your points and I completely agree.
12Step:
Difficulty: see if you can do it while keeping your argument straight. As it stands, you’re ~10% substance and ~90% name calling. Come on, you’re a bigger man than that, aren’t you?
Well aside from the whole “Pot - Kettle” thing, let me try to explain this to you one more time. Someone posted on here that WalMart made their millions on the backs of people working for low wages and no benefits. I merely said no one forced these people to work for WalMart. These people could get another job if they weren’t happy for WalMart. Okay, with me so far? Good. Let me continue. I also said that the 1st amendment did not say that people have to join a Union. Virginia is a “right to work” State. No one has to pay Union dues unless they choose to do so. If you don’t want to join a Union, that’s your choice. Get it? And if you are in a situation that you feel that you do have to pay Union dues against your wishes, then, yes, get another job.
I really don’t see where this is so hard to understand. I really don’t.
Jack—For the most part, my relatives who worked in those industries are retired or have passed on.
One who put 20 years in at a specialty steel mill now draws a modest pension from that company. He manages the grounds of the local K-12 school.
I also find the comment that companies exist to create profits, nothing more and nothing less, rather immature. It reflects a stunted sense of citizenship and moral development. Business leaders who think at a more advanced and mature level do focus on the creation of jobs and social stability. They understand that without creating a stable and thriving middle class there will be no consumers for their products.
I don’t expect you to change your view on that, but I take comfort in knowing that your viewpoint is not associated with best-in-class corporate leadership.
I’ve also had plenty of relatives who have worked in steel and auto manufacturing and were union members.
And what are they doing now? Perhaps banging on the doors of Toyota, Honda and the other foreign owned non-union auto manufacturers here seeking a non-union job?
Funny you think unions were not the single largest cause of the decline of the auto and steel industry. Then why as soon as the concessions were made by the unions to levels non-union American workers make at foreign owned auto plants did the companies start to recover? Ford especially.
I have been a union member and in company management so I do have knowledge from both sides.
Americans especially union workers better get used to the global economy. Wages and benefits are going to drop to reflect the worldwide cost of producing a product. American consumers are going to continue to shop by price not country of origin. If nobody is buying the higher priced products there will be no company in America able to continue in business.
Companies don’t exist to provide jobs. They exist to produce products and services for a profit. Nothing more, nothing less. When retailers can buy products Americans want overseas for less, ship them here and sell them for less, then that’s what they do.
PA-24—You state that unions, politicians, and corporations are full of corruption.
Your argument for the elimination of unions is biased, because you see corruption everywhere, yet you want to take action only against workers, and in a manner that can only benefit corporations.
Then you hold out hope in the form of speculating that legislators would step in and take care of workers by enacting laws that would improve worker’s economic status. That is what the Democrats are trying to do with health care insurance reform—and no Republicans are joining to help out.
How can you expect anyone to take you seriously when you put forth these types of positions?
I’ve sat on collective bargaining committees, and I’ve paid union dues in a right-to-work state where plenty of my peers did not join the union yet still benefited from the collective bargaining which was paid for out of union dues. I’ve also had plenty of relatives who have worked in steel and auto manufacturing and were union members. They had great salaries and benefits, but the unions were not the things that drove those employers into bankruptcy.
Steel in the USA failed due to overseas competition—cheap steel—and lowering wages in the USA would not have saved the US steel industry. Auto manufacturers—GM for example—ran a failed business strategy for nearly 10 years, and it is management, not labor, that is accountable for the business strategy.
Pointing at the unions and arguing that the unions are exploiting the corporations is ridiculous.
I also saw what happened when the employer unilaterally changed employee benefits. We who had a union and collectively bargained for those benefits were able to file a grievance and win back our benefits. Peer of the same employer at other locations where there were no unions lost those benefits.
Finally, the Taft-Hartley Act ensures that workers do not have to join unions, even in union shops—the worker can opt out by paying only that amount of union dues that cover collective bargaining and other activities that benefit all employees. Employees are not forced to contribute to the union’s political work or efforts to organize employees at other companies.
I’m pointing this out so you can avoid agreeing with DandyAndy, who clearly knows nothing about this topic.
More of this to come as Obama and admin insist on “spreading the wealth” A stimulus plan spending hundreds of billions on extended unemployment, COBRA subsidies, endless over regulation of business, bailouts of failed companies, cap and trade, climate change… instead of reinvesting that money in the capitalistic system and allowing money to trickle down. Wealth trickles down, Wealth trickles down, wealth trickles down…
Its going to get worse (just like it did in ALL OTHER SOCIALIST COUNTRIES)until we re-embrace capitalism.
Yes, some people will make alot more money than other people. Yes some people will be luckier, or have better opportunities. But the only thing that trickles up is poverty.
1.9 million jobs in new energy
Virginia should be doing more to embrace new, renewable energy!
“Being forced to join a Union and being forced to pay Union dues is NOT protected under the 1st amendment. This has absolutely nothing to do with “assemble and freely associate”. You can assemble and associate with anyone you like….you just should not be forced to.“-Dandy
“All I said was that the 1st amendment does not mean that anyone is forced to join a Union.“-Dandy
Sorry if I read more sense into that second statement by giving you the benefit of the doubt, thinking you were still referencing your original point. Silly me, thinking that your whole diatribe (well, aside from the name calling and condescension) was about people being forced to join a union and pay dues against their will. Once again, my mistake for thinking that you were actually referencing anything of substance. As it is written, that second statement has zero efficacy relating to the legality of unions (the original thread of the conversation, if you can recall…. I understand recollection is not your strong point, but it’s still there for your review).
Perhaps you can clarify: if a person can retain employment anywhere they choose (as stipulated by yourself earlier), how can it be construed that they are forced to pay union dues when they could just pick up and go to work at a place that doesn’t have a union and, thusly, no union dues.
Difficulty: see if you can do it while keeping your argument straight. As it stands, you’re ~10% substance and ~90% name calling. Come on, you’re a bigger man than that, aren’t you?
No, 12Step, I have done no such thing! Where exactly am I wrong? Just because you disagree with someone doesn’t automatically mean that they are wrong. All I said was that the 1st amendment does not mean that anyone is forced to join a Union. I went on to say that no one has to work for a non-union company. I never said anything about anyone being “persecuted” because they joined a Union. Where do you come up with those things?? I mean really, are you so insecure in your beliefs that you have to resort to putting words in someone’s mouth? You can whine and cry about some self perceived “insults” all you want but twisting my words and mis-interpreting what I say does not change the truth. You sound like some little child on a school ground crying because other kids can play ball better than you. Come on man…you’re bigger than that…aren’t you? Well, maybe not, but at any rate, I really don’t care.
I’ve already addressed any “information” about the thing with Bush’s “vacations” so please get over it and move on.
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