CHARLESTON, W.Va. — Coal production in West Virginia has increased by 19 percent since January, state Revenue Secretary Dave Hardy said Wednesday.
That increase along with a 60 percent increase in the price of natural gas put severance tax collections for April at $10.8 million above estimates, Hardy said.
“That’s very encouraging but it also takes time for that economic activity to be reflected in other revenue numbers,” Hardy told reporters during the his office’s monthly conference call on revenue collections.
Overall for April, tax collections were $58.2 million below estimates bringing the year-to-date shortfall to $160 million. State lawmakers passed several measures during the regular session to make up the gap including the sweeping of accounts and dipping into the Rainy Day Fund.
Collections for Personal Income Tax (down $42.9 million) and Consumer Sales and Use Tax (down $14 million) missed the mark in April, Hardy said.
“I think we’ve bottomed out on coal but it’s a very slow recovery,” Hardy said. “Next year you’ll see the improvement in personal income tax at this time for what happened in 2017.”
Hardy and Deputy Revenue Secretary Mark Muchow appear most pleased with the increase in coal production.
“I think it’s fair to say at this point that it’s becoming a trend,” Hardy said.
Muchow didn’t disagree but said the 19 percent increase in production from Jan-April needs to be put in perspective.
“The last 52 weeks the production numbers in West Virginia for coal are roughly the same as they were the prior year,” Muchow said. “There’s a recent uptick there but when you’re talking about 85 million tons of coal that’s still quite a bit lower than it was three or four years ago.”
Muchow does anticipate revenue estimates for severance tax collections next fiscal year would need to be adjusted.
“Certainly severance tax for next year is looking very positive,” Muchow said.
There are two months remaining in the fiscal year.