Revenues, led by growth in individual income tax receipts, exceeded expectations by about $311 million, bringing the commonwealth's total tax collections to more than $15 billion,
Gov. Bob McDonnell said on Tuesday. Fiscal 2011 marks the first year since 2008 of actual revenue growth over the previous year.
McDonnell hailed the trend, but emphasized that the state is hardly in the clear.
"We are far, far away from having certainty and predictability in our state finances," he said, stressing the strain of looming unfunded mandates.
The state's retirement system is about $18 billion underfunded, he said. And in a series of swipes at the federal government, he bemoaned health care legislation that will require $2.2 billion from the state by 2022, and Environmental Protection Agency requirements for cleanup of the Chesapeake Bay that could cost the public and private sectors up to $8 billion.
"There's a long way to go before we're out of the woods," McDonnell said.
About $150 million of the surplus is slated to help refill a rainy-day fund that has seen its share of rainy economic days since the start of the recession in 2008. More than $32 million will go to a state water quality fund, and more than $4 million will go toward tornado relief following April's devastating storms.
State Secretary of Finance Ric Brown said the surplus is expected to grow after agencies turn in their fiscal year savings, but that the total tally won't be known until mid-August. McDonnell said a portion of that excess will be used to fill the state's underfunded retirement system.
The state's news comes as Northern Virginia's economy has been improving, said Lisa Sturtevant with the George Mason Center for Regional Analysis.
"We'd been seeing declines in state and local government employment in Northern Virginia, and we may now be close to the end of that," she said. "It's nice to be in Virginia -- and especially in Northern Virginia."
There's one downside to the local economic uptick, however: "If the state has extra money, they're not going to spend it up here," she said.