Boosted by growth in individual and corporate income taxes in a month not typically significant for revenue collections, Virginia posted a 15.7 percent revenue increase in October, Gov. Robert F. McDonnell announced Tuesday.
But McDonnell cautioned October’s good news comes amidst uncertainty over the future of the federal government, as Congress prepares to address the fiscal cliff.
“While any increase in revenues is certainly positive … Virginia must look beyond these short-term increases and prudently prepare for how to weather any potential financial challenges in the coming months,” McDonnell said in a statement. “To not do so would be irresponsible.”
Collections of payroll withholding taxes rose 13.8 percent compared to October 2011, and collections of individual non-withholding taxes rose 43.2 percent. Due in part to late corporate September payments, collections of corporate income taxes rose 143 percent.
Total revenue collections rose 4.8 percent through October, ahead of the annual forecast of 2.9 percent growth. October’s increase follows a 0.7 percent decrease in September.
Last week, McDonnell asked all state agencies to submit their plans on how to reduce spending in their departments by 4 percent as his administration prepares the upcoming budget.