State tax collections in Virginia grew by a rollicking 17.9 percent in May over May 2010, officials announced Wednesday, a sign of the economy’s continuing improvement.
But included in the report was a sign a possible future trouble: Growth was sparked by a 49 percent increase in final annual income tax payments — but payroll and sales tax growth slowed.
Revenue has so far grown 5.8 percent for the year, a rosy figure well ahead of the projected 3.5 percent and a sign that the state will post a healthy surplus when the fiscal year ends June 30.
This marks the 14th month out of the past 15 in which state revenue grew over the year before. As he has repeatedly before, Gov. Bob McDonnell (R) said the numbers were a sign of an economic turnaround, but he counseled caution and noted that the state’s unemployment rate, which is lower than much of the rest of the country’s, is still significantly above where it stood before the economic crash.
“This means there is still much work to be done before we find ourselves with the full and robust economic recovery our commonwealth and nation needs,” McDonnell said.