CHARLESTON, W.Va. — West Virginia missed tax collection estimates for the fourth consecutive month in October.

State Deputy Revenue Secretary Mark Muchow said Friday October collections were off by $8.1 million and so far this fiscal year the state has brought in $42.5 million less in tax revenue than it thought it would.

Muchow said personal income tax continues to be the weakest area. It missed estimates by almost $8 million last month and is down more than $35 million since July.

Muchow said those with jobs aren’t seeing an increase in their wages.

“And until we see some improvement in wage and salary growth we’re going to see a continued pattern of very sluggish growth in withholding taxes,” he said.

The strongest performing tax so far this budget year has been the severance tax—because of natural gas not coal.

“It was the weakest tax last year and this year so far it’s our strongest tax,” he said.

Severance tax revenues are up by 10 percent from last year’s numbers.

Muchow said there is cause for concern when looking at the overall revenue collection picture.

“We will need some improvement in both economic activity as well as tax revenue growth in order to balance the picture by the end of the year,” he said. “The growth rate that we now need for the rest of the year is about 3-point-6 percent. If this was a normal year in West Virginia that’s about what we could expect for revenue growth.”

Unfortunately, Muchow said, this isn’t shaping up to be a regular year for revenue collections.

Gov. Earl Ray Tomblin is already looking at a second straight year of 7.5 percent budget cuts for most state agencies.

 

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Comments

  • Dale

    I agree. The food tax was fair to all who actually pay taxes. Removing it was no help to households.

  • rog

    I agree with u, hillbilly. Bring back and keep the 6% food tax. That tax brought in over $200 mil a year. And everyone had to pay it

  • hillbilly

    Smart people would have left food tax in place. Half the population buys with food stamps anyway.

    • The truth

      That was the lie the politicians told to the masses that the tax hurts the poor. It's us the middle class bearing the cost.

    • susanf1218

      I agree. The food tax was meaningless as far as individual household income. But it played well for the politicians to make it sound like they were actually doing something. And sadly, too many people actually believed it!

  • CaptainQ

    This means the return of the dreaded Food Tax could happen as early as next year.

    What choice does the state have? Where else is it going to get the money to pay WV's growing debt load?

  • RogerD

    I'm sorry. This just can't be happening. The media and Washington experts have all told us the recession ended years ago. The economy is thriving, isn't it? (tongue in cheek)

  • Cant_You_See

    Why is it so hard to see the connection between an increase in natural gas extraction = decrease in coal production. Specifically coal for energy production.

  • wvu999

    Still have HUNDREDS OF MILLIONS in the rainy day fun

  • blugldmn

    The gas industry would hirexWV's if they wanted to work and would show up.

    Another great WV myth is the work ethic ... It has been ruined by years of democratic vote buying with public assistance money.

    • The truth

      I agree with you, the majority of the hard workers leave the state.

  • blugldmn

    Part of it's my fault...

    I stopped buying scratchers..

  • Joe

    I think expanding medicaid was a terrific idea Governor.

    • susanf1218

      Yes, that was just pure genius, now wasn't it?? But Earl Ray will be out of office before the true costs of this boondoggle are really going to hit.

  • Dale

    Cut give away programs. Drug test recipients.

    • wvtd

      that idea makes to much sense to go far in wv.

  • JTC

    This is also a reflection of the gas industry and how they are hiring so many out of state workers whose state income tax goes back to their home states, while we in WV continue to get those great minimum wage jobs. Coal miners salaries have went down since the Reagan administration started destroying unions in the 1980's.

    • Max

      JTC...coal miners wages have been going down ever since Democrats and their union cronies have been destroying coal markets and instituting rediculous EPA regulations...don't blame Reagan for destroying unions...it was your buddy Jimmy Carter who started the EPA...and your buddies in the unions would support Democrats if the Dems said tomorrow we think coal should be banned totally...you people can't be reasoned with!!!

      • susanf1218

        The EPA is not the problem, but they are part of the solution!

      • Paul

        Not Carter at all but Richard Nixon who proposed and brought the EPA on board.

  • Wowbagger

    More Jobs, Lower Taxes!

    ...Right!

    How about Less Jobs, No Coal Mining, No Growth. Kiss Obama's Heinie. Now that's more like Earl Ray!

  • State Employee

    Let me guess no pay raises again this year? Earl Ray has this state going in reverse.

  • What happened to WV?

    Fight harder to keep coal here and this would not be happening!