Va. revenue grows over past year, still lags behind forecast

State revenue collections grew in October over the same month a year ago -- but collections for the fiscal year to date are lagging behind budget forecasts.

State revenue grew by 3.7 percent in October over a year ago, Gov. Bob McDonnell (R) announced Friday, an increase driven largely by an uptick in sales and individual income tax withholding receipts. It's the seventh month out of the last eight that have seen better tax collections this year than last.

But the news is not all rosy. After adjusting for an accelerated sales tax program that provided a boost to the state's collections in July, state revenues have grown by 3.6 percent this year.

The General Assembly adopted a budget assuming revenues would grow by 4.2 percent this year. The Governor's Advisory Council on Revenue Estimates will review the forecast soon and provide updated figures, which McDonnell will use to recommend changes to the budget for this year and next, when the General Assembly meets in January.

In a statement, McDonnell said the monthly revenue report is one sign of a "modest turnaround" in the Virginia economy. But he said the economic outlook remains uncertain.

"These pieces of good news do not erase the clouds of uncertainty that still hang over our economic landscape," he said. "Together, working across party lines, we must continue to identify and implement every possible policy that will spur economic growth and private-sector job creation.