State revenue secretary: January bump didn’t erase budget shortfall

CHARLESTON, W.Va. — Though state tax collections exceeded January’s estimate, officials weren’t ready to declare an economic turnedaround.

Tax revenues brought in approximately $391 million last month, some $8 million above projections. Yet state Deputy Revenue Secretary Mark Muchow said the uptick in collections was largely a “technical issue” as the state remained $73 million below estimates for the fiscal year.

State Revenue Secretary Bob Kiss said Monday the current state budget may require more cuts or a midyear search for additional revenue.

“There may be a need for more action,” Kiss said.

Gov. Earl Ray Tomblin ordered a hiring freeze last month and reduced state spending in some agencies. The legislature has also been asked to appropriate one-time revenues.

“We may need to revisit that, yes,” Kiss said.

The major drag on  collections this year has been the personal income tax category, which shows a current shortfall of $61.6 million. The consumer sales and use tax ended January with a shortfall of $14.2 million.

“Everything else put together is pretty close to being on estimate,” Muchow said.

There are five months remaining in the fiscal year and Muchow said natural gas production will be a big key heading forward.

“We’ve seen things slow down recently,” Muchow said, “(but) with improvements in natural gas production and maybe a more stable coal environment, hopefully we’ll have a little gain on the severance tax side.”

Kiss was cautious about January’s revenue numbers improving over December.

“I still don’t think we’ve turned the curve that we keep hoping to turn,” he said. “We continue to see, I think, some significant challenges for the current fiscal year.”

Kiss predicted the state would not have a problem providing timely state income tax refunds, thanks of a bill in front of the legislature that would allow money to be taken out of the state’s Rainy Day fund.

“If that legislation passes I don’t anticipate refunds are going to be a problem,” Kiss said.

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