FOR IMMEDIATE RELEASE
Study Finds Disparity in State Tax Revenue and Disbursements
Charlottesville, VA – Virginia state tax revenue generated by economic activity and the disbursement of such revenue vary dramatically according to a study released today. The Common Wealth Report, underwritten by The Charlottesville Regional Chamber of Commerce and compiled by the Free Enterprise Forum, studied state tax revenue generated in each locality for FY2011 and direct State funding for the same period.
At the start of the study, it was theorized that a significant portion of State Tax revenue would return to the locality where it was generated. There seems to be an inverse correlation between economic prosperity and direct state funding. While not universal, those localities with the greatest contribution of State taxes tended to be “donor” localities with less tax revenue returning to the locality when compared with taxes sent to Richmond.
Of the localities studied, the Common Wealth Report identified the City of Petersburg as the largest recipient of State funds as compared to taxes generated. Charlottesville was second with the Commonwealth returning $1.66 in State spending to the locality for every dollar sent to the state.
Fairfax County accounts for 23.5% of all income tax collected in Virginia. Fairfax County is the largest donor locality included in this study. For every tax dollar sent to the Commonwealth, Fairfax receives $0.36 back. Albemarle County is the fourth largest donor locality studied.
The Common Wealth Report does NOT include transportation tax revenue nor transportation spending in its calculations. In addition, due to reporting variations income tax data from FY2009 was used to complete the tax generation data.
Free Enterprise Forum President Neil Williamson said “Our goal in developing the Common Wealth Report is to provide citizens an objective locality-specific metric to be used to compare state tax generation and state spending between municipalities. Perhaps informed with an objective metric such as the Common Wealth Report, additional study can be done to determine what it is citizens are getting for their money and whether they are getting their money’s worth.”
According to Timothy Hulbert, President of the Charlottesville Regional Chamber of Commerce, the Chamber chose to underwrite this report to “provide guidance for local officials and citizens alike about the importance of economic vitality statewide.
“This report reminds all of us that we are citizens of the Commonwealth of Virginia. We in Charlottesville are directly impacted by economic forces in the rest of the state,” Hulbert said.
The Free Enterprise Forum is a privately funded, public policy organization.