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Virginians’ Income Showed Record Increase, But Not All Shared In The Gains

January 5, 2001-- A national economic slowdown may be under way, but many Virginians have enjoyed recent steady advances in their incomes, according to an analysis of state income tax data by the University of Virginia’s Weldon Cooper Center for Public Service.

In 1998, the most recent year for which figures are available, the statewide median for adjusted gross income on married couples’ tax returns was $50,849, according to the study by economists John L. Knapp and Stephen C. Kulp. This represented a 5.8 percent gain from the previous year, and a 4.2 percent gain after adjusting for inflation, and set a new Virginia record for an increase in one year. It was the fourth year of gains in real income for Virginians. (The median is the income level at which half of those who filed taxes received more and half received less.)

However, median incomes varied widely in localities across the state. And there has been a disturbing widening of the gap between low and high incomes, the economists said in the annual report, "Virginia Adjusted Gross Income."

The five localities with the highest median incomes for married couples in 1998 were all located in Northern Virginia: Fairfax County ($77,173), Loudoun County ($77,033), Falls Church city ($75,567), Arlington County ($70,735) and Prince William County ($65,832).

Four of the five counties with the lowest median couples’ incomes were in Southwest Virginia: Russell ($28,841), Dickinson ($27,509), Buchanan ($27,503), and Lee ($25,856). Northampton County ($28,935) on the Eastern Shore was the fifth lowest. In three out of 10 returns in these localities married couples had income of less than $15,000, below the poverty level for a family of four.

"The dominance of Northern Virginia is clear," Knapp and Kulp said, noting that in 1998 the region accounted for almost $40 of every $100 in state income. The Hampton Roads and Richmond areas, together with Northern Virginia, accounted for 69 percent of the state’s total income.

Over the five-year period from 1993 to 1998 the Charlottesville area had the largest gain in income, with close to a 56 percent increase in the median. But many regions of the state, including the Southwest and Southside, grew quite slowly.

Most disturbingly, income inequality --- the gap between higher incomes and lower ones -- continued to increase dramatically in Virginia, the economists said. An index of income concentration that measures inequality showed a large increase for the fourth consecutive year and rose sharply from the previous year.

Educational disparities and a booming stock market that benefited many upper-income households have been among the factors widening the income divide. Goochland County, a Richmond suburb, and the cities of Lexington and Williamsburg had the highest concentrations of unequal incomes.

Contact: Bob Brickhouse, (804) 924-6856

FOR ADDITIONAL INFORMATION: please contact the Office of University Relations at (804) 924-7116. Television reporters should contact the TV News Office at (804) 924-7550.
SOURCE: U.Va. News Services


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