State makes adjustments to handle tax refunds

CHARLESTON, W.Va. — The state is expected to finish the current fiscal year somewhere between $60 million-$80 million short of estimates for tax collections. The February revenue numbers were released Tuesday.

State Deputy Revenue Secretary Mark Muchow said the state missed estimates by $5.3 million for the month but collected $13.5 million more in severance tax revenues than expected. Muchow said that’s not because of an improvement in the coal and gas business but more about timing of when the taxes were submitted.

Muchow said the state has put $32 million into a special fund to help pay for state income tax refunds. The total fund now has a $42.5 million balance. He said the emergency fund would likely be totally exhausted. The state anticipates returning $122 million in refunds over the next four months. Muchow said the special fund helps.

“Just in case we have cash flow issues down the road we’ll have money set aside for purposes of the income tax refunds and they should not be hindered by any type of shortfall that might go on in the revenue collections,” Muchow said.

Muchow said ending the fiscal year with at least a $60 million revenue shortfall will impact the current state budget.

“There are other measures that are pending consideration in the legislature that could help close the gap but other than that there would have to be adjustments in spending (in the current budget),” he said.





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