The State of West Virginia concluded the fiscal year with general revenue collections exceeding estimates by $370 million.
The state’s total general revenue collections for the fiscal year that just concluded were $5.693 billion.
Collections for the month of June surpassed $569 million, a figure that exceeded the monthly estimate by $57 million.
Gov. Patrick Morrisey, a Republican, said the financial outcome is a result of discipline. He said the money could be used to fund already-outlined priorities that government officials often call “the back of the budget.”
In this case, the budget accounted for the possibility of $245 million in one time expenditures that could be funded in case revenues exceeded estimates.
“When you focus on the fundamentals and exercise fiscal discipline, we put West Virginia in a position to end the fiscal year strong as revenues continued to outpace our projections,” Morrisey said.
“Because of our significant surplus, we will fund every obligation in the back of the budget, including $125 million for roads and infrastructure, fully fund the Hope Scholarship, and other important priorities. Our next budget will aggressively fund education, foster care, infrastructure, law enforcement, and other key initiatives while providing tax relief to our citizens.”
Personal income tax and severance tax were the most robust areas of collections.
Personal income tax collections were $237 million in June, exceeding the monthly estimate by $48 million.
For fiscal 2026, personal income tax collections are the single-largest source of collections above estimate at $159 million.
“Personal income tax was one of the main drivers,” state Revenue Secretary Eric Nelson said on MetroNews Talkline.
Collections exceeded estimates significantly but grew over the prior fiscal year by $52 million, or 2.5%, below the rate of inflation. Moreover, the trends do not fully incorporate the rate reductions provided in the previous legislative session.
Consumer sales tax collections exceeded the monthly estimate by $4 million, with total collections for June reaching $183 million.
For all of fiscal 2026, collections were 2.2% above estimate ($41 million) and $131 million (7.2%) above the prior fiscal year.
“The one area of consumer sales tax we’d like to focus on is the growth of the prior year, which has exceeded 7 percent,” Nelson said, “and so that’s more than double the inflation rate, and we attribute a lot of that to again our income tax relief that the governor has promoted and those dollars being spent on items across the state.”
The year-over-year growth in consumer sales tax collections is a positive sign for increasing consumer activity throughout the state, but officials offered caution that in recent months, including June, growth rates have been positive but below the rate of inflation.
Severance tax collections, which reflect taxes on natural resources, were $63 million in June, exceeding the estimate by $30 million.
Severance tax collections exceeded their estimate by $136 million for the fiscal year, with $534 million in actual collections against an estimate of $398 million.
“Most of that has been led by higher production in our natural gas industry in the prices that they receive,” Nelson said.
Severance tax collections beat the prior fiscal year by $95 million. State finance officials warned that he ongoing conflict with Iran will continue to exacerbate the volatility of the already volatile revenue source.
Conversely, corporate net income and tobacco products taxes saw declines, reflecting shifting economic conditions and consumer habits.
Corporate net income tax collections in June were $8 million below estimate. For the fiscal year, collections also ended $8 million below estimate and were $70 million less than the prior fiscal year.
Tobacco products tax collections exceeded their estimate by $2 million in June and ended the fiscal year with collections below estimate by $3 million. As consumption patterns shift over time away from traditional cigarette products, state financial officials anticipated that this category will continue to decline.