Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, June 19, 1990 TAG: 9006190136
SECTION: VIRGINIA PAGE: A-3 EDITION: STATE
SOURCE: By Associated Press
DATELINE: RICHMOND LENGTH: Medium
The committee received a report from state Finance Secretary Paul Timmreck on the shortfall announced last week for the budget year that ends July 1.
Timmreck said the state has taken in less money than expected because of lagging individual and corporate income-tax collections. He said 1986 federal income tax reform and the pension tax break passed in Virginia last year may have caused the problem.
Some of the shortfall could be due to errors made by Virginia retirees in computing the pension tax break, which returned about $83 million to taxpayers, Timmreck said. With a 10 percent error rate, the state could have lost $8 million, he said.
State Tax Commissioner William Forst said afterward that checks of some tax returns showed taxpayers made mistakes in computing the pension deduction, but he did not know the extent of the problem.
"We know that it happened," he said. "It's not a $100 million problem."
Timmreck was questioned sharply by legislators about why the forecast of state revenues was wrong. He said his office will review its methods but still thinks it has one of the best revenue-forecasting systems in the country.
"Where we need to do a better job in Virginia is on the monitoring of the revenues on a month-to-month basis," he said.
The committee heard a rosier report from state Lottery Director Ken Thorson, who said the lottery has done well this fiscal year despite an expected "sophomore slump."
In its first fiscal year that ended June 30, 1989, the lottery had sales of $409 million and returned $140 million to the state's general fund.
For the fiscal year that ends next week, the lottery should produce about $455 million and return $150 million to the state, he said.
Without the "sophomore slump" that often strikes lotteries in their second year after the novelty wears off, about $545 million in tickets would have been sold, Thorson estimated.
Still, he said, the Virginia lottery did better in per-capita sales in its second year than five other neighboring or similar-sized states did in their second years.
Thorson said he expects ticket sales will reach $560 million in the fiscal year that starts July 1 and will bring about $178 million to state coffers.
Lottery revenues usually increase steadily after the second year as the pool of players grows, he said.
Thorson said the state may add at least one new feature to its lottery games in the coming year. The options include a subscription service to allow residents to play by mail, a Pick 4 game or expansion of the Lotto game to twice-weekly drawings.
by CNB