Three-quarters of the way through the fiscal year, state government is running three-quarters of a billion dollars ahead of annual revenue estimates.
“Now, not only are we on the rocket ship ride, we’re kicking back and really enjoying ourselves,” Gov. Jim Justice said in a briefing today. “We’re continuing to pump out record after record after record.”
The state’s fiscal year runs from July to July. West Virginia government estimated bringing in $3.226 billion in general revenue by this point in the year.
So far, West Virginia’s government has collected much more than that, $3.966 billion.
That puts the annual collections $740 million ahead of estimates, according to figures out from the state.
For the full fiscal year, Governor Justice’s administration had estimated bringing in $4.569 billion. Collections have already reached 87 percent of that mark with three months remaining in the fiscal year.
One of the biggest factors is personal income tax.
State officials had estimated that by this point in the year income tax collections would bring in $1.395 billion. So far, $1.64 billion in income taxes have actually been collected. That is already almost $245 million over the original estimate.
Severance tax on coal and natural gas is also way up.
By this point in the fiscal year, state officials had estimated $226 million in severance tax collections. What’s come in so far has just about doubled up on that, $$500 million.
“We want to just keep rolling,” Justice said.
When state legislators gathered last month and passed a budget for the upcoming fiscal year, they included, as usual, a set of spending priorities for if the state ends the current fiscal year with a surplus.
The big difference this year is the amount anticipated. The budget bill accounted for the possibility of a billion dollars in extra collections at the end of the current fiscal year.
Of the billion dollars in possible spending at the end of this fiscal year, the biggest items include:
— $600 million, the biggest piece, to loans through the Department of Economic Development. Fixes for a separate but related bill establishing a fund to hold that money is the reason Governor Justice is calling a special session later this month.
— $100 million to the governor’s civil contingent fund, meant to augment possible congressional earmarks.
— $50 million for a mining reclamation insurance mutual just established by the Legislature.
The majority in the House of Delegates also wanted $256 million in possible year-end surplus to go toward savings for the possibility of income tax cuts on down the line. The governor used his line-item veto on that priority, saying, in part, that no fund had been established for the savings.
Kelly Allen, executive director of the nonprofit West Virginia Center on Budget & Policy, referred to those spending priorities outlined by state officials and said the priority for using the historic revenue collections. instead, should be shoring up services for state residents.
“States across the country are enjoying revenue surpluses due to a combination of historic federal investment, climbing energy prices, and conservative revenue forecasts coming out of the pandemic. These surpluses should be invested in programs that benefit West Virginia workers, families, and our state’s economy like health care, child care, and education,” she said.
“Instead, the budget passed by the legislature and signed by the governor allocates nearly 95 percent of the surplus to benefit big business and special interests with little or no public oversight.”