WASHINGTON -- Virginia officials say recovery may not be in the picture, even though revenue collections have come in close to a late August projection for fiscal 1992's first quarter.
"We're right in line with the forecast," Paul W. Timmreck, Virginia's finance secretary, said last week. "There's no cause for alarm. But there's no sign of an economic turnaround, either."
On Aug. 23, Gov. L. Douglas Wilder told the General Assembly's money committees his administration was forecasting 3.1% revenue growth for the 1992 fiscal year, which began July 1. The money panels include the Senate Finance, House Appropriations, and House Finance committees.
In an OCt. 16 memorandum to the chairmen of the money committees, Mr. Timmreck said year-to-date revenues have shown 3% growth from fiscal 1991. Mr. Timmreck's September report on August revenued also showed 3% growth.
"A 3% increase in revenues in certainly better than a 1% decline," Mr. Timmreck said in an interview last week, "But it's not inflation plus employment growth."
One bright spot in the state's revenue collection efforts came from individual income tax receipts, which in September were 11.3% above last September's figures. The receipts brought fiscal year-to-date growth to 6.7%, compared with the August estimate of 3.3%.
However, Virginia's total nonagricultural employment has been declining since the second quarter of the 1990 calendar year, and "the data continues to show a decline through the second quarter of 1991 -- or five consecutive quarters," Mr. Timmreck's memorandum says.
"We have to be mindful that any good news is tempered by bad news," Mr. Timmreck said in the interview.
In other revenue categories, Virginia's sales tax receipts were down 2% in September on a year-to-date basis. Officials have forecast 1% growth in sales tax collections for the year, but they anticipated lack-luster performance through the end of the current calendar year.
Under the August forecast, sales tax revenues were expected to decline 3% in the July-through-September quarter, so the actual receipts were slightly better than expected. The forecast calls for sales tax receipts to fall 1.7% in the following quarter before increasing 7.5% during the first three months of 1992.
Corporate income tax collections also remain sluggish, falling 9.1% in September from the previous September's levels and pushing year-to-date growth down 5.6%. The August forecast calls for income taxes to grow 5.8%, compared with fiscal year 1991 levels.
Summing up the data, Mr. Timmreck in his memorandum said, "Although strength in monthly withholding is a major factor in total performance, it's too early to view this as a sign that recovery has begun in Virginia, especially when sales and corporate income tax collections are weak."
Nevertheless, he said the year-to-date total revenue growth for the first quarter is "encouraging."
Another state official said, "We're not dancing in the streets yet, but we're comfortable with where revenues are right now."
Earlier in the year, officials projected a $2.2 billion budget gap for the 1991 and 1992 budget period. To eliminate the potential deficit, Gov. Wilder and the General Assembly agreed to a host of budgetary savings.