General fund revenues continue to run ahead of official projections, despite a January slowdown, Gov. Abigail Spanberger said last week. Collections declined 1.4 percent from January 2025, but fiscal year-to-date revenues through the first seven months of FY 2026 are up 6.9 percent — about 2.9 percent above forecast — driven by strong individual income and sales tax receipts, while corporate income taxes continue to lag.
“As expected, revenues fell slightly in January, while year-to-date collections remain above last year’s levels,” said Spanberger. “Over the past several months, employment growth has slowed significantly across the country and working families are feeling the squeeze. I look forward to working with the General Assembly to make our Commonwealth more affordable for all Virginians.”
Net individual income tax revenues increased 0.3 percent for the month compared to January 2025. On a fiscal year-to-date basis, net individual income tax collections are up 10.4 percent. Collections of sales and use taxes, reflecting December sales, increased 6.9 percent in January and are up 5.8 percent year-to-date. Corporate income tax receipts have dampened this growth, declining 17.6 relative to last year.
Compared to the official forecast assumed in HB30 — the pending two-year budget, revenues are ahead of expectation by 2.9 percent. While there is reason for cautious optimism in Virginia revenues, we must continue to be responsible and remember the need for structural integrity of the budget.
