CHARLESTON, W.Va. — The state dropped below revenue estimates again with taxes collected in August but neither Revenue Secretary Dave Hardy or Deputy Revenue Secretary Mark Muchow are pushing the panic button.
Both want to wait to see the September collection numbers what Muchow called during a conference call with reporters Monday “the key test month of the year.”
September is when the first round of quarterly estimated taxes are due. It will be a good gauge of how the state’s economy is doing, Muchow said.
“I suspect the income tax will perform better than last year,” he predicted. “I’m looking for the income taxes to boost the September numbers a little bit.”
Hardy expressed similar optimism.
“It’s very difficult to make any long-term projections based on July and August but we’re cautiously optimistic that based on what we’ve seen in July and August, September is going to be good as well,” Hardy said.
August collections did put the state down $19.3 million after the first two months of the fiscal year but Hardy said that’s still $20.7 million more collected than last year at this time.
“We’re ahead by 3.9 percent and that’s certainly really good news and that’s actually collected revenue,” Hardy said.
August numbers were hurt mostly by what Muchow described as “a little pause” in natural gas severance collections. The price for natural gas in this region is below the natural average for two key reasons, he said.
“We still have significant limitations on pipeline capacity and add to that–during the summer months there’s a significant less demand for natural gas than there is during the winter months,” according to Muchow.
The increase in the gasoline tax, automobile privilege tax and DMV fees started to show in August. The fuel tax was 11.5 percent ahead of estimates while license and registration fee collections jumped 62 percent. The money goes into the state Road Fund.
Other highlights included in a Department of Revenue news release:
Personal Income Tax collections fell short of estimate by $10.5 million. Cumulative collections of more than $255.3 million were nearly $0.8 million below estimate and just 1.6 percent above prior year receipts.
Consumer Sales and Use Tax receipts fell $0.4 million below estimate. After adjustments and transfers, revenue increased by 3 percent for the month. Cumulative collections were up by just 1.5 percent as compared with an overall increase in State sales tax collections of 3 percent.
General Revenue Fund Severance Tax collections totaled more than $28.6 million, an amount that was nearly $7.9 million below estimate. Total severance tax collections for the month increased by 8 percent over last year. Cumulative collections of $25.2 million were $15.7 million below estimate, but more than double prior year-to-date receipts.
Insurance Premium Tax collections totaled $0.8 million and cumulative collections totaled $27.6 million. August collections were $2.9 million below estimate and nearly 87 percent below last year. Cumulative collections were less than $1.1 million below estimate and 2.4 percent below prior year receipts.
Tobacco Product Excise Tax collections totaled $15.7 million. Monthly collections were $0.1 million above estimate and 35.5 percent below prior year receipts. Cumulative collections of nearly $32.8 million were $4.5 million above estimate and 13.6 percent below prior year receipts.
B&O Tax collections of nearly $9.6 million were slightly below estimate and 30.7 percent below prior year receipts. Cumulative collections of $18.5 million were $0.6 million below estimate and 4.4 percent below prior year receipts.