The following is my column that will appear in the Mt. Vernon Gazette, Springfield Connection, and Potomac Local in the week of July 15, 2018.
Setting Budget Priorities
Last week, Governor Ralph Northam announced that Virginia finished the fiscal year with $551.9 million more in revenue that we projected when writing this year’s budget.
First, the good news is that most of this surplus is due to increased tax revenue from payroll withholding taxes, not one-time revenue sources like capital gains or tax avoidance strategies related to the recent changes in federal tax laws. The Virginia economy has truly started to perform again.
However, it is important to keep these numbers in context. The state’s General Fund has been under significant stress over the decade since the Great Recession and automatic federal spending cuts caused by a process called a “sequester.” In the nine years I have served in the General Assembly, this is the second fiscal year that the Commonwealth has experienced revenue growth equal to or greater than the historical average.