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Changes to the federal tax code last year that unintentionally raised the state income tax for many Virginians was the largest factor in a $778 million budget surplus for 2019.
Gov. Ralph Northam's office said state income tax revenue rose by 7.2 percent, which is higher than the forecasted 3.3 percent the state would have had without the tax windfall. These funds were expected, but not included in the official forecast.
"With revenue collections coming in at $2.4 billion for the month, I am happy to announce that preliminary figures indicate that the state concluded the year with a general fund revenue surplus of approximately $778 million," Northam said in a news release. "Since I took office in 2018, we have worked to diversify Virginia's economic base and make strategic investments in key fundamentals like health care, infrastructure, workforce development, and education."
Much of this money will be diverted back into the hands of taxpayers through a one-time refund in October designed to compensate taxpayers for the inadvertent increase. Single filers will receive $110 and couples will receive $220.
"We have a history of being prudent and responsible, and when you combine that with a growing economy, the results are positive," House Appropriations Committee Chairman Chris Jones (R., Suffolk) said in a news release. "It's good news for sure, but we have to continue to be conservative. A significant portion of this one-time money will go to the taxpayer relief fund and our revenue reserve funds. We must look around the corner, and that's what we will continue to do."
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