CHARLESTON, W.Va. — The state started out the new fiscal year with more than $17 million less in tax collections that it had anticipated. The numbers were released Monday.
State Revenue Secretary Bob Kiss said the state continues to struggle with lower collections from coal severance tax and personal income tax collections.
“We’re not entirely surprised. I think we’re optimistic that things in the long-term will be better but we are continuing to see things in the short-term with specific challenges,” Kiss said. “We’re not seeing the turn around that we were hoping to see.”
It’s a numbers game for the state right now while revenues for coal severance are down, tax monies for natural gas are up.
“The amount of growth we need to see in oil and gas and the revenue that it brings with it needs to be significantly higher than the loss we’ve seen in coal,” Kiss said. “The trend there is hopeful but we still have quite a ways to go.”
Personal income tax collections finished $11.2 million below estimates for July while withholding tax revenues also missed the mark. Kiss said, even though it’s not linked to general revenue, lottery proceeds continue to be cut by competition from other states. He said the state is still waiting for that to bottom out. The state has also been hurt by a significant reduction in exported goods from a high of $7.5 billion in 2012 to $4 billion this past fiscal year.
Gov. Earl Ray Tomblin decided to keep a state government hiring freeze in effect. Kiss said the freeze saved the state $33 million last fiscal year and continues to give the current budget the flexibility it needs. He’s hopeful the economy will turn around before the state is forced to make other budget moves.
“I think it’s too early to make that call yet. It’s certainly not time to hit any kind of panic button,” he said.