WASHINGTON, July 10 (Reuters) - Virginia’s revenues fell in the fiscal year that ended on June 30, missing expectations and creating a $438.5 million shortfall, the governor’s office said on Thursday.
Virginia survived the 2007-2009 economic downturn relatively unscathed, and the fiscal year 2014 marks the first time its income has dropped outside of a national recession, according to the office of Governor Terry McAuliffe.
Total general fund revenue collections were down 1.6 percent from fiscal 2013, compared with the forecast of 1 percent growth, mostly because of an unexpected decline in capital gains taxes.
Federal tax breaks expired at the end of 2012, prompting many taxpayers to sell off investments and otherwise “accelerate” their income into that year. Virginians “shifted more realized capital gains from 2013 into 2012 than expected,” said the office. Altogether, the non-wage income taxes missed estimates by $401.1 million.
Meanwhile, withheld individual income taxes, which make up nearly two-thirds of Virginia’s revenues, rose from the previous year by 2.3 percent. That was still $66 million, or 0.6 percent, lower than expected. Sales and use taxes, 19 percent of total revenues, were $12.9 million, or 0.4 percent, below estimates. (Reporting By Lisa Lambert; Editing by Mohammad Zargham)