The declines were paced by decreases in income tax receipts and the levy paid to record real estate transactions.

The "nonwithholding" tax paid chiefly by investors and the self-employed dropped by nearly one-fourth, from last May's collections of $687 million to $516 million last month.

In her monthly memo to Gov. Timothy M. Kaine, Finance Secretary Jody M. Wagner described it as "a significant retreat in nonwithholding payments" that drove 13.8 percent decrease in general fund revenues.

The withholding tax paid most wage earners pay dropped by nearly 7 percent, or about $52 million, from May 2007. The tax is important because it constitutes nearly 60 percent of total general fund collections.

The tax paid to record deeds as well as wills, contracts and lawsuits, fell by 27 percent from the same month last year, from $49.2 million last May to $35.7 million last month. It was also the sixth consecutive month of "recordation" tax declines of 20 percent or more, evidence of a Virginia housing market still struggling to rebound from the home mortgage crisis.

The poor monthly showing leaves the state with year-to-date revenue growth of 1.8 percent entering the final month of its fiscal year. That's slightly ahead of the revised state forecast for 1.2 percent revenue growth on which the current state budget is based.

The report came after better-than-expected April collections. Because both are significant months for revenues, Wagner said, the April and May reports should be considered together to accurately assess growth.

That makes this month critical in determining whether the state finishes with more money than spending commitments in the state budget that expires on June 30.

June is also a significant month for tax collections, Wagner wrote, and collections for the month "must total about $1.62 billion to meet the forecast for the fiscal year."

The state collected $1.68 billion last June.