New figures show West Virginia’s state revenue collections at $236,354,390 below estimates with one month left in the fiscal year, but Gov. Jim Justice says no need to worry.
“While the numbers are net ‘not great’ we’re trending in a way that West Virginia economically is going to be OK,” Justice said during a briefing today.
West Virginia is obligated by its constitution to conclude the fiscal year with a balanced budget.
Justice and his administration’s revenue officials had earlier said the state might be $500 million down at the close of the fiscal year.
They reached that by estimating the delayed payments of $300 million in income taxes until July 15 and another $200 million because of the slowed economy caused by coronavirus precautions.
But Justice today said the state’s financial situation has not been as bad as anticipated.
“We have done better in revenue collections in really the tail end of April and throughout all of May than we thought we would do,” he said.
Figures released by the Senate Finance Committee showed West Virginia’s general revenue collections for the month of May at $37,653,555 below estimate.
That included personal income tax collections at $11 million below estimate; sales tax collections $9 million below estimate; and severance taxes $16.7 million below estimate.
For weeks, Justice has held out hope that the federal government provide additional money to states or increased flexibility to use relief money to backfill state budgets.
West Virginia has $1.25 billion in federal relief already on hand, but guidance issued a few weeks ago by the U.S. treasury department concluded such money should only be spent on direct costs of coronavirus response or to help businesses and individuals affected by the response.
Today, Justice referenced new federal guidance allowing more flexibility although the specifics weren’t immediately clear.
The governor said he no longer believes the state will need to use Rainy Day Fund money or call in the Legislature to shift money around.
“We’re going to be OK. West Virginia is going to be OK,” Justice said.
Delegate Mick Bates, D-Raleigh, agreed that monthly revenue looked better than anticipated. But Bates, the lead Democrat on the House Finance Committee, suggested West Virginia could still conclude the fiscal year $300 million down.
“Revenue came up a little better than I was anticipating. At this point, I’ll take any good news I can get,” Bates said.
But Bates said he is unaware of new federal guidance providing greater flexibility with relief money.
Otherwise, he said, “if the revenue collections are less than what the estimates are, you still have to cut things.”
Bates said legislators need to know more details about the state’s financial plan soon, particularly if they wind up needing to convene at the Capitol while a pandemic is still going on.
Nevertheless, he said, “I’ll take any good news at this point.”