CHARLESTON, W.Va. — The state could finish the fiscal year with a $40 million surplus in revenue collections, state Deputy Revenue Secretary Mark Muchow told members of the legislature’s Joint Committee on Government and Finance Monday.
The possibility is linked to improved severance tax collections and moves the governor’s office and legislature made earlier this year to fill a revenue gap that could have climbed to as much as $192 million, Muchow said.
Severance tax collections have shown a significant increase in the last five months.
“At the end of May it was almost $40 million ahead of estimates itself,” Muchow said.
Most of the improvement has come in the increase price of natural gas. Muchow told lawmakers improvements in the Dominion pipeline system have helped remove the glut of natural gas. There’s also been a 19 percent increase in coal shipments from January through May. Most of those gains came in northern Appalachia, Muchow said.
After questioning from Senate Finance Committee Chairman Mike Hall (R-Putnam), Muchow confirmed severance tax collections could be as much as $80 million better than estimates next fiscal year.
State law requires any revenue surplus at the end of the fiscal year be split between allocations to the Rainy Day Fund and the other half to surplus appropriations.
State Revenue Secretary Dave Hardy is scheduled to release May’s revenue collections report Tuesday.