CHARLESTON, W.Va. — Shifting numbers put the state’s revenue collections ahead of estimates in January by $13 million
A closer look shows Gov. Jim Justice adjusted the projections downward on Jan. 9 and the general revenue fund received $20 million from the office of Treasurer John Perdue.
Correspondence from the state Senate Finance Committee Monday said Justice lowered the revenue estimates by $16.5 million, including a $6 million reduction for January and a $10.56 million reduction for April.
If January’s revenue estimate would have remained the same, the state’s collections would have ended the month $13 million below estimates, which would have taken the overall revenue collection shortfall to $46 million.
Severance tax collections continued to struggle in January. The $20.4 million in collections missed estimates by only $800,000 but the amount was 33.2% below the severance tax revenue collected in January 2019. Severance tax collected so far this fiscal year is $38.6 million below estimate.
Personal income tax collections were $1.9 million below estimates for January while consumer sales tax collections beat estimates by $1.2 million.
Gov. Jim Justice tried to put a positive spin the numbers in a Monday news release.
“Our numbers continue to show that West Virginia is in good financial health, pacing very close to last-year’s record-breaking numbers,” Justice said. “That said, we must continue to be conservative in our budgeting, so I encourage the Legislature to continue monitoring these numbers just like Secretary Hardy and I will.”
State Revenue Secretary Hardy said January marked the second month the shortfall in collections had decreased.
“We’re seeing positive momentum in a lot of areas – like our corporate net income tax being more than 60 percent above last year’s receipts – and this momentum is occurring despite the loss of thousands of jobs due to the halting of pipeline construction, and our year-to-date severance tax collections coming in 34 percent below last year. These numbers show, more than anything, that West Virginia’s economy is diversified and set up for future success,” Hardy said.
Perdue announced the $20 million transfer on Jan. 13.
Perdue said half of the money will come from his office’s Banking Services account because of some positive investment returns while the other $10 million from the Unclaimed Property Fund.
“We were able to get good interest rates from the Board of Treasury investments and from the legal settlements we’ve been able to accomplish in unclaimed property,” Perdue said.
The state released the following summary of collections Monday:
Personal income tax collections of more than $222.2 million were more than $1.9 million below estimate in December, but 2.8% ahead of prior year receipts. Cumulative personal income tax collections of nearly $1.196 billion were $35.6 million below estimate and 1.4% ahead of prior year receipts. Year-to-date income withholding tax collections were 0.2% below prior year receipts due to weaker employment activity within the energy sector and the loss of an estimated 4,000 jobs in natural gas pipeline construction. Current legal hurdles are weighing down overall wages and tax revenue growth at this time.
Consumer sales tax collections of $128.4 million were more than $1.2 million above estimate in January and 3.0% ahead of prior year receipts. Cumulative collections of $811.5 million were $1.6 million below estimate and 1.8% above prior year receipts. Collection growth has slowly accelerated in recent months after a slow start earlier this fiscal year.
January severance tax collections totaled nearly $20.4 million. Monthly collections were more than $0.8 million below estimate and 33.2% below prior year receipts. Year-to-date general fund severance tax collections of more than $156.4 million were $38.6 million below estimate and 34.7% below prior year receipts. Year-to-date local tax distributions paid out of general revenues were actually up by 7.0% from the prior year due to higher energy prices, and growth in coal, oil and natural gas sales in prior periods. However, the quarterly coal severance tax distribution totals for January were down 9.3% from last year.
B&O tax collections totaled $9.2 million in January and $76.7 million for the year-to-date. Monthly collections were up 7.9% from the prior year. Cumulative collections were nearly $13.0 million above estimate.
Corporation net income tax collections totaled $11.0 million in January and nearly $108.6 million for the year-to-date. Monthly collections were $9.5 million above estimate and 60.2% above prior year receipts. Cumulative collections were $32.8 million above estimate and 4.0% above prior year receipts.
January tobacco products tax collections of $13.1 million were $0.4 million below estimate and 3.1% below prior year receipts. Cumulative collections of nearly $98.7 million were $7.8 million below estimate and 3.9% below prior year receipts. The relatively large recent decline in collections is partially due to some shift in consumer tastes away from traditional products toward e-cigarette products.
Miscellaneous Receipt collections totaled more than $10.2 million in January and $15.6 million for the year-to-date. Cumulative collections were more than $9.4 million above estimate more than triple prior year cumulative receipts.
Interest income receipts totaled more than $12.0 million in January and more than $27.1 million for the year-to-date. Cumulative receipts were nearly $7.7 million above estimate and more than 150% ahead of last year.