- The Washington Times - Sunday, June 15, 2003

RICHMOND (AP) — Whether state government finishes the fiscal year within its budget depends on how much the state collects this month in taxes and other revenue, the state’s top finance officer said.

With only June remaining in fiscal year 2003, Virginia revenues for the year were up by 1.3 percent over collections though May of last year. That means that for June, revenues must remain on target to meet the required annual estimate of 1.2 percent growth.

“It’s pretty much on target, but June needs to be on target exactly to meet the forecast,” Finance Secretary John M. Bennett said Friday in an interview.

That means the government needs at least $1.26 billion in general-fund revenues before the new fiscal year begins July 1 to bring in the amount of money on which the state’s oft-revised budget was based.

That’s not a particularly tall order in a budget that demands, on average, slightly more than $2 billion a month in revenue from all sources to meet spending commitments of about $50 billion during a two-year budget cycle.

But if June collections come in low, Gov. Mark Warner has to make up the difference, largely by spending cuts or borrowing from the final year of the budget cycle.

A year ago, final collections came in well below their targets, forcing the state to cut deeply during an austere fall and winter. Mr. Warner and the legislature have had to cut a combined $6 billion since the start of 2002.

Meeting this year’s targets became more interesting Friday with the announcement that revenues for May were down about 6.5 percent compared with collections for the same month the previous year. Sluggish income-tax withholding payments and sales-tax collections were responsible for the downturn.

May’s results were not as bad as they seemed, Mr. Bennett said. Much of the May downturn resulted from processing changes that allowed the state to collect far more of its individual income taxes in April that, in the past, had lagged into May.

“April was not as strong as it appeared because we shifted a lot of non-withholding collections up, so that means that May looks worse than it really is,” Mr. Bennett said.

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