CHARLESTON, W.Va. — Gov. Jim Justice announced Monday revenue collections in January missed estimates by $3 million but he said he’s not upset about it.

Office of the Governor

Jim Justice

Justice said during a state capitol news conference the state remains on track for a very good fiscal year with collections. He said missing the mark by $3 million isn’t bad when you consider he recently adjusted revenue estimates upward by $142 million. The move came after the state had collected $185 million more in taxes than it thought it would through the first six months of the fiscal year.

Justice said the new numbers also send a message to state leaders who have a direct impact on the budget.

“The good part about coming in a little short is it is a little bit of a shot across the bow for all of us in government to say, ‘Let’s don’t get carried away upstairs and think that money is just coming from everywhere under the sun,'” Justice said.

Following January’s numbers, the state is now approximately $40 million ahead of estimates for the fiscal year. Justice said that new collection surplus number is expected to grow between now and June 30.

“We believe that these numbers are going to continue to be really good but I love it that what we’ve done here is we got something other than just runaway revenue where everybody is going to try and spend every dollar in the history of the world,” he said.

Justice has already promised millions of dollars for pay raises and additional spending for increasing health care costs for state workers.

Several factors had an impact on the collection numbers into last year’s federal tax reform, quarterly estimated tax payments for the month were down 22.7 percent from last year. The money is expected to surface in about two months.

Taxes that continue to perform well include severance, personal income, consumer sales, and corporate net.

Other revenue information released by the governor’s office Monday:

January General Revenue Fund collections of $422.3 million were $3.0 million below estimate, but still 7.4% above prior year receipts. The small shortfall was mainly due to weaker than anticipated monthly Personal Income Tax collections.

Year-to-date collections of nearly $2.657 billion were nearly $40.9 million above the revised estimate and 12.5% ahead of prior year receipts. The sharp rise in year-to-date collections was attributable to very high rates of growth in Severance Tax, Corporation Net Income Tax, Consumer Sales Tax and Personal Income Tax collections. Year-to-date General Fund Severance Tax collections were 45.7% ($75.1 million) ahead of last year. Year-to-date Corporation Net Income Tax collections were 73.7% ($44.3 million) ahead of last year. Year-to-date General Fund Consumer Sales Tax collections were 12.0% ($85.5 million) ahead of last year. Year-to-date Personal Income Tax collections were 7.5% ($82.0 million) ahead of last year.

A summary of major components follows:

January Personal Income Tax collections of nearly $216.3 million were $10.7 million below estimate and 0.8% above prior year receipts. Cumulative collections were $8.7 million below the revised estimate and 7.5% ahead of prior year receipts. The December shortfall was due to a combination of factors including some negative impact on quarterly estimated payments and other return payments associated with the new $10,000 limited on federal itemized deductions for state and local taxes paid. After declining by more than 65% in December, January estimated payments of $58.9 million were roughly $1 million below estimate, but still 4.3% ahead of prior year receipts. Tax refunds were up 12.4% for the month, non-resident withholding tax receipts were down by nearly 69% and return payments were down by nearly 52%. After a robust 22% increase in December, January income withholding tax payments of $156.3 million were $1.8 million below expectations and 4.2% ahead of last year. The temporary federal government shutdown may have contributed toward the slower growth numbers. Cumulative withholding tax collections of more than $1 billion were a strong 11.9% above prior year receipts. Withholding tax collections previously grew by 9.1% during the final three months of FY2018.

January Consumer Sales and Use Tax collections of $124.7 million were $2.5 million above estimate and 5.4% above prior year receipts. Cumulative collections were nearly $6.4 million above the revised estimate and 12.0% ahead of prior year receipts. Overall collection growth, including transfers to special revenue funds, was a robust 10.1%for the year-to-date. After rising at a more modest clip of roughly 2% during most of last year, total sales tax collections rose at much higher rates of 7.8% in June, 13.3% in July, 12.9% in August, 10.1%in September, 9.4% in October, 10.7% in November, 11.2% in December and 5.4% in January, respectively.

January General Revenue Fund Severance Tax collections of $30.5 million were nearly $0.6 million above estimate and 17.0% ahead of prior year receipts. Year-to-date General Revenue Fund severance tax collections were $2.7 million above the revised estimate and 45.7% ahead of prior year collections. Total cumulative severance tax collections for all funds were up by 38.6%. Recent strong growth in collections was partially attributable to growth in the value of foreign exports of coal. In addition, natural gas prices are trending higher than last year with greater price stability this year.

Corporation Net Income Tax collections totaled nearly $6.9 million in January, an amount that was $4.9 million above estimate and $15.3 million better than prior year January net receipts of roughly -$8.5 million. Monthly gross collections were up 17.7% for the month and tax refunds were down 95.6% from nearly $14.9 million last year to less than $0.7 million this year. Cumulative collections of $104.4 million were $30.4 million above estimate and 73.7% ahead of last year. A significant portion of the recent increase in collections was attributable to the energy sector.

Tobacco Products collections totaled nearly $13.5 million in January, an amount that was $1.1 million below estimate and 2.0% below prior year receipts. Cumulative collections were $3.0 million below estimate and 2.8% below prior year receipts.

January Business and Occupation Tax collections of nearly $8.6 million were roughly $0.6 million below estimate. Cumulative collections of nearly $62.0 million were $0.9 million above estimate and 6.0% ahead of prior year receipts.

State Road Fund
In January, total State Road Fund collections of $100.8 were $3.0 million above estimate and 1.1% below prior year receipts. Due to normal timing variations, State-sourced revenues were 16.5% lower than the prior year in January, following a 42.2% surge in the prior month. The change in revenue patterns was due to calendar month timing variation with the last day of December 2017 falling on Sunday and the last day of December 2018 falling on Monday. As a result, monthly Motor Fuel Excise Tax collections due on the last calendar day of each month were 37.7 percent lower in January after rising by more than 116% in December. January Motor Fuel Excise Tax collections were nearly $3.2 million below estimate. Following below average collections in December, January License and Registration Fee collections were $5.4 million above estimate and 51.1% above prior year receipts. Monthly Motor Vehicle Sales Tax collections of $19.9 million were $1.6 million above estimate and 11.3% above prior year receipts. Federal reimbursements were $0.8 million below estimate, but more than 84% ahead of last year.

Cumulative State Road Fund collections of $733.6 million were $96.3 million below estimate and 1.9% below prior year receipts. Federal reimbursements were $122.1 million below estimate due to a time lag associated with a recently implemented upgrade in technology. Discounting federal reimbursements, total collections of $521.7 million were $25.8 million above estimate and 1.4% ahead of prior year receipts. Cumulative Motor Fuel Excise Tax collections were $2.0 million above estimate and 5.7% ahead of last year. Cumulative License and Registration Fees were $12.7 million ahead of estimate and 12.7% ahead of last year. Cumulative Motor Vehicle Sales Tax collections were $10.3 million above estimate and 10.6% ahead of prior year receipts.

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