WASHINGTON Nov 13 Virginia's revenues fell 5.4
percent in October from the year before, the fourth decline in
2013, as the partial federal government shutdown took a bite out
of withholding tax collections, and corporate, sales and
recordation taxes tumbled, Governor Robert McDonnell said on
For the fiscal year that started in July, revenues are up a
slim 0.6 percent, behind the forecast for 1.5 percent growth.
"The federal government continues to fail at the most basic
of functions, including most recently failing at just the simple
act of remaining open," said the outgoing governor, a
Republican, in a statement. "This is having a direct impact on
the finances of Virginia's residents and our state government."
Individual income tax withholding, which makes up nearly
two-thirds of the state's revenues, rose only 0.5 percent in
October from October 2012.
"Although federal employees were paid, the impact on federal
contractors may have dampened growth in this source," said
Virginia Finance Secretary Ric Brown.
Sales taxes, which make up about a fifth of revenues, fell
1.7 percent and corporate income tax collections, providing 5
percent of revenues, were down 60 percent.
Virginia steamed through the 2007-09 recession with few
economic problems because of its proximity to the nation's
capital. Along with being home to a multitude of federal workers
and contractors, the state is the site of many military
installations. From July 2011 through December 2012, Virginia's
revenues only fell three times.
In 2013, they have also fallen in February, March and
August, after the federal budget cuts known as sequestration
took effect. Then, in October, congressional deadlock led the
federal government to furlough employees and suspend some
McDonnell said the sales tax drop reflected retail activity
in September, and the effects of the shutdown on shopping will
likely appear in next month's report.