We wanted to update you on a recent bit of correspondence about tax collections released this week. In a memo dated Tuesday, March 14, 2006, to the Governor from Virginia Secretary of Finance Jody Wagner, she reports: "Through February, revenues grew 10.6 percent over the same period last year."

Other points of interest from the mid-session revenue reforecast show:

* Collections from estates, inheritance and gifts declined by $13 million from the same time last year, or 11.7% less was collected from death taxes, likely reducing the eventual fiscal impact of repealing the tax.

* The General Fund (state tax collections) increased by about $900 million over the same time last year ($9.3 Billion by February 2006 vs. $8.4 Billion by February 2005), or a 10.6 percent increase year-to-year.

* In addition to those tax revenues, profits generated by the Virginia Lottery originally were projected to grow at 2.4% for the year. The reforecast shows that through February 2006 they had actually grown nearly 15%, or $40 million above the same time last year.

* Net individual income tax collections are more than 9 percent above what was collected through the same time last year, or an increase of just under $500 million.

* Corporate income tax collections are 85.9 percent over the same time last year, over $240 million more than by February 2005.

We are hopeful that the General Assembly in their special session scheduled to begin March 27, will work to resolve their differences on repealing Virginia's death tax. In the $75 billion budget for 2007-08, the House death tax repeal plan will cut taxes by $98.9 million. In on-going years, full repeal will total about $120 million a year.

The information gathered above can be found in the accompanying documents linked below.

March 14, 2006 Memo to Governor Kaine about tax surpluses


Revenue Reforecast (2/20/06)

You can contact your legislator directly by clicking here.

The General Assembly will return to Richmond on March 27 to consider the state budget and legislation pertaining to revenue (including repeal of the Death Tax). We will keep you posted on developments, of which there have been few.

Below are links to several news articles regarding the budget. You can also contact your legislator directly by clicking here.

Repeat performance

Editorial, Free Lance Star

March 14, 2006

State revenues continue growth in February

Bob Lewis, Associated Press

March 15, 2005

Budget negotiators begin salvaging budget deal

Bob Lewis, Associated Press

March 15, 2006

Kaine Seeks Victory for Both Sides in Tax Impasse

Mike Shear, Washington Post

March 15, 2006

Conferees begin bargaining to overcome budget impasse

Michael Hardy & Jeff Schapiro, Richmond Times-Dispatch

March 16, 2006

Getting back to the budget

Chelyen Davis, Free Lance Star

March 16, 2006

Talks break until Tuesday-- House ponders Hampton Roads transportation authority

Bob Lewis, Associated Press

March 16, 2000