NORFOLK, Va. — Gov. Youngkin said in a news release that Virginia has $5.1 billion in excess revenues.
To explain the numbers, Youngkin noted some taxes increased in revenue despite projections they were going to decrease.
For example, he said money collected from sales taxes was supposed to decrease 1.3%, but wound up actually increasing 3.9%.
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The Richmond Times Dispatch notes the $5.1 billion figure may appear higher than reality as some people who paid a certain tax will be owed refunds.
Old Dominion University economist Dr. Robert McNab said the figures show the economy is doing better than originally thought.
"The way to think about this is you were expecting a pay cut. Instead, you're getting a pay raise," McNab said.
There had been concerns Virginia could face a recession in 2023, but so far that concern hasn't happened.
"We've seen hiring continue in Virginia. We've seen business activity continue to increase. We've seen the unemployment rate go down," said McNab. "The state is doing better than expected."
Now, the question is what to use the money on.
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Lawmakers in Virginia pass two year budgets and can amend the budget this year, but so far can't agree on how to use the money.
Gov. Youngkin has been pushing for tax cuts, including cutting the corporate tax rate.
"We need to reduce our taxes because Virginians are overtaxed and yet we have substantial resources to invest in education, which we had a record budget last year in education, in law enforcement, in behaviorial health, of which we have a crisis in Virginia," he said last month. "We've got a clear cut plan that has bipartisan support."
In response, House Democratic Leader Don Scott (D-Portsmouth) told News 3, "“The Democrats presented a plan that gives the Virginia GOP the chance to use the budget surplus to do the right thing and make investments into the future of the Commonwealth. Instead they chose corporations."
While that debate continues McNab says there are concerns about rising fuel and grain prices, but is looking ahead to next year.
"I expect that we will sort of muddle through 2023 not growing as fast as we did last year, but certainly better than we did in previous years. Then, the question is how do we fair with declining inflation with rising employment? I suspect 2024 might be a good year," he said.
