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.