- The Washington Times - Wednesday, October 15, 2003

RICHMOND — After a three-year slump, Virginia revenues rebounded strongly during the first quarter of the state budget year, outpacing collections for the same period last year, despite the costliest natural disaster in the state.

Revenues for the state’s general operating fund for July, August and September grew 8.4 percent from the same quarter last year, beating the official estimate of 4.6 percent growth for this fiscal year.

For September, when Hurricane Isabel struck, Virginia took in 6.1 percent more in tax receipts than it did last year during this significant month for revenue collections.

The quarterly report, released yesterday by Finance Secretary John M. Bennett, is the most optimistic since 2000, when the recession began to take hold and cut into what had been several record years of double-digit state revenue growth.

The good news, however, could present a challenge for Gov. Mark Warner and legislative budget writers if the revenue trend continues through the fiscal year. If revenues exceed the annual estimate by at least one-half percentage point, the final phase of the 1998 car tax cut is automatically triggered.

Finishing the four-step car-tax phaseout, dormant since 2001 because revenues were insufficient, would push well past $1 billion annually the reimbursements the state must pay cities and counties for their lost car-tax receipts.

That would have to be factored into a new two-year budget that legislators and administration officials say will require more spending cuts.

The Virginia Department of Taxation also announced yesterday that its tax-amnesty program is on track to meet a goal of boosting tax collections by $48 million. For two months ending Nov. 3, the state is waiving the penalty and cutting in half the interest due for people who pay delinquent tax bills.

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