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Governor Justice highlights improving state revenue

CHARLESTON, W.Va. — Governor Jim Justice called a press conference today to tout improving state revenue figures.

The Justice administration also described positive conversations with bond ratings agencies about the Roads to Prosperity bond sale that voters approved last year. And members of the administration said West Virginia’s job participation rate had improved, although it still ranks last in the nation.

“Somehow we keep missing the point of telling good news,” Justice said, a point he made several times about several different topics during his hour-long press conference.

Usually the administration presents monthly revenue reports via conference call.

April’s state revenue was $23.7 million above projections, Justice and his top revenue officials said today as they gathered in the Governor’s Reception Room.

The state is nearing the end of the fiscal year. The new fiscal year starts in July.

Administration officials said the state is right on target to conclude the fiscal year, and they feel good about the state’s financial shape for the coming fiscal year.

“We are on target to finish on June 30 at $4.225 billion, which will be the largest revenue ever in the state of West Virginia,” said state Revenue Secretary Dave Hardy. “I think it would be fair to say it’s an economic miracle.”

Collections for the current fiscal year are 4.4 percent above the prior year, revenue officials said.

Deputy Revenue Secretary Mark Muchow said much of the bounce in April came from personal income tax collections, which were $13 million above estimate for the month.

The current fiscal year is operating under the budget that Justice let pass into law without his signature last year. “I can’t possibly put my name on it,” Justice said June 21, 2017, after the Legislature passed a budget with millions of dollars in cuts.

Justice had preferred a revenue plan that year  featured increasing sales taxes a few months ahead of decreasing personal income taxes. He saw the deal as the only way he could get through a budget without cuts to state programs.

“I would tell you as voters, you have to pay attention. These people — too many people are here to be re-elected,” the governor said during last year’s news conference to express his objections to the budget. “If they’re voting the wrong way and causing pain, you’ve got to do something about it.”

Asked today about whether he still feels that way — with revenue matching expenses for most of this fiscal year — Justice continued to express disappointment. He said some of the cuts that occurred going into this fiscal year could have been avoided and other programs could have been launched.

“There are things we could have done that we didn’t do that we cost people a year of waiting or more,” Justice said today.

State leaders had been operating under projections of a $450 million deficit.

Justice initially proposed millions of dollars in tax increases to fill the gap.

Senate President Mitch Carmichael today praised the state’s financial progress. But a news release sent out by Carmichael referenced Justice’s early proposal to raise taxes last year.

“To resolve this critical issue, many people – including a then-Democrat governor – called for massive tax increases on the people and businesses of West Virginia,” Carmichael stated today. “Had their proposals become law, it would have represented the largest tax increase in state history.”

The governor eventually raised revenue estimates for this fiscal year by $129 million, which meant no tax increases for the general fund and also fewer cuts to state programs.

“Everybody stood back and said ‘Oh, no, no. It’ll never happen,” Justice recalled today.

Although plenty of legislators were relieved about the increased revenue projections, there was some skepticism about whether they were borne of necessity.

“We had to plug in a number to get to a zero. Somebody had to plug in a number. What if I hadn’t plugged in $129 million in revenue raise, what would we have done?” Justice said today.

Carmichael’s news release credited the Republican majority in the House and Senate for avoiding tax increases last year and instead opting to cut.

“Although a then-Democrat Governor placed cow dung upon the budget and allowed it to become law without his signature, this responsible budget, crafted by a Republican legislature, has resulted in fiscal success for West Virginia,” Carmichael stated.

“Our state is not fully healed, but we have stopped the bleeding and begun the healing process.”

Justice had spent much of the early part of that session talking about the state budget as a patient on an operating table, sometimes describing spurting blood.

“To me that ought to be the headline: ‘West Virginia stable, strong and growing,'” Justice administration chief of staff Mike Hall said today. “We have turned the corner.”

Here are the administration’s highlights for the April revenue report:

Highlights for April include:

  • Collections of $535.3 million were $23.7 million above estimate and 6.3% ahead of last year. Year-to-date collections of more than $3.49 billion were equal to nearly 99.9%of the year-to-date estimate and nearly $146 million higher than last year.
  • Personal income tax collections exceeded estimate in April by more than $13 million due to a 10.4% gain in withholding tax collections. Cumulative collections of more than $1.6 billion were $52.3 million above estimate and 6.5% ahead of last year.
  • Corporation net income tax collections exceeded the April estimate by $4.6 million. Year-to-date collections were $1.8 million above estimate and 0.4% ahead of last year.
  • Severance tax collections exceeded estimate by more than $5 million in April. Year-to-date collections of $273.7 million were 21.8% ahead of last year.
  • Insurance premium tax collections were nearly $5.3 million ahead of estimate in April. Cumulative receipts were more than $6.5 million ahead of estimate.
  • Even though consumer sales tax collections fell nearly $3 million below estimate in April, collections were still 3.6%ahead of last year.
  • General Revenue Fund collections remain on target to meet or exceed year­ end estimates.
  • Cumulative State Road Fund collections of nearly $667 million were $22.4 million above estimate and 19.2% ($107.5 million) ahead of last year.


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