It’s going to take a better-than-expected last five months of the state budget year for revenue collections to meet estimates.
State Deputy Revenue Secretary Mark Muchow tells MetroNews tax collections for Jan. were $394.5 million, which was $11.6 million below estimates. The state is nearly $8 million behind estimates year-to-date.
“We’ll do our best but there’s no guarantee that we’re going to meet estimate this year,” Muchow said.
West Virginia’s budget success or failure hinges on energy and severance tax collections for this fiscal year continue to under perform. They were $9.5 million below estimates in January. That’s 35 percent below last year’s collections. Severance tax revenues are down nearly $30 million overall from last fiscal year.
Muchow says coal production continues to decline along with coal-related employment. He says these are record times for natural gas production but the prices for natural gas are at historic lows.
“That will change eventually but it may take some time to work its way up,” he said.
There have been budget surpluses in West Virginia for the last several years because tax collections have exceeded estimates. Muchow does not expect a repeat performance.
“We’re treading water but the seas are pretty rough out there,” he said. “I’m not looking for any significant level of surplus this year.”