CHARLESTON, W.Va. — West Virginia’s state revenue ran slightly higher than expected this past month.
That’s important to know as state leaders determine whether a revised revenue estimate for the coming fiscal year is reliable.
Gov. Jim Justice bumped up the revenue estimate for next fiscal year by $58 million this week as the state tries to figure out how to pay for a greater pay raise for educators.
The Senate majority, in particular, has said the revised estimate was born of necessity as teachers have walked out of schools all over the state.
They say the state is starting an economic recovery and have expressed concern that January’s revenue was down by $28 million.
This past month did have a modest turnaround.
West Virginia’s General Revenue Fund collections for last month of $272.2 million were $8 million above estimate and 8.1 percent ahead of prior year receipts, the Justice administration reported in a news release Friday afternoon.
The surplus is attributable to gains in consumer sales and use, business and occupation and personal income taxes, the administration said.
Justice stated he is very encouraged by the numbers.
“The shortest month of the year has brought us a surplus,” Justice stated. “We remain on track to hit our revenue estimates and our state is in much better financial health because we are continuing to manage our resources in a fiscally responsible and prudent way.”
Cumulative year-to-date General Revenue Fund collections of more than $2.6 billion was slightly below estimate by just $17.5 million, but state revenues are holding at 99.3 percent of estimates for the fiscal year.
Department of Revenue Secretary Dave Hardy is pleased with what the agency is tracking.
“As of last month, West Virginia was experiencing a growth rate of 4.7 percent. Last year’s growth rate averaged 1.3 percent,” Hardy said. “And we’ve still got four months to go, two of which are always strong collections months for us. We like what we are seeing.”
The Justice administration also made note of these financial benchmarks for February:
Personal Income Tax collections of $86.3 million exceeded estimate by nearly $1.6 million and prior year by 12.2 percent. Cumulative collections of nearly $1.2 billion exceeded year-to-date estimate by $41.9 million and prior year by 5.9 percent. Year-to-date withholding tax collections were up 5.6 percent.
Consumer Sales and Use Tax receipts of nearly $95.6 million exceeded estimate by $4.1 million and prior year by 2.9 percent. After adjustments for municipal sales tax collections and special revenue transfers, state sales tax revenue increased by 2.5 percent for the month. Cumulative General Revenue Fund sales tax collections were up 1.1 percent as compared with an overall net increase in state sales tax collections of 1.9 percent.
“Continued growth in disposable income and increased construction activity are expected to improve collection trends for the remainder of the fiscal year,” Hardy added.
Severance Tax General Revenue Fund collections of $36.1 million exceeded estimate by roughly $0.9 million and prior year by 25.4 percent. Year-to-date, Severance Tax collections of $200.5 million were $26.1 million below estimate but 24.9 percent ahead of prior year receipts.
B&O Tax collections of nearly $13 million were $3.4 million above estimate and 12.6 percent ahead of prior year. Year-to-date collections of $71.5 million lagged estimate by nearly $4.8 million but still exceeded prior year by 3.4 percent.
Corporation Net Income Tax collections of -$0.5 million were $0.6 million above estimate due to refund activity. Cumulative collections of $59.6 million exceeded estimate by $3.6 million and prior year by 4.2 percent.
State Road Fund collections of $59.8 million lagged estimate by nearly $0.9 million but exceeded prior year receipts by 30.4 percent. Cumulative collections of $530.3 million exceeded estimate by $10.2 million and prior year receipts by 16 percent.