West Virginia on track to end 2018 with revenue surpluses
CHARLESTON — The state of West Virginia got an early Christmas gift.
Tax revenues came in above estimates for the fifth month in a row, Gov. Jim Justice said.
According to the state Department of Revenue, revenue collections for November came in $18.8 million above estimates for the month. The numbers were driven by higher-than-expected personal income tax collections, the consumer sales and use tax and coal and natural gas severance taxes.
As of the end of November, West Virginia’s tax collections are $141 million above estimates and 13.2 percent ahead of tax revenue numbers during the same period in fiscal year 2018. It is the fifth month during this fiscal year that started July 1 where collections have surpassed estimates and the eighth month in a row overall.
“It’s a long string of W’s, and that’s what we want to keep stringing together,” Justice said during a press conference Tuesday. “Trust me, things are really good and moving in the right direction.”
In November, personal income taxes came in $7.3 million ahead of estimates with $135.6 million and 11 percent above last November’s collections. The revenue bump was due to higher-than-expected withholding tax receipts. November consumer sales and use tax collections came in $5.8 million above estimates at $121.2 million, 10.8 percent above last November.
November severance tax collections came in at $7.8 million above estimates at $42.4 million thanks to coal exports to foreign markets and higher trends in natural gas prices. Severance tax collections are 34.2 percent ahead of the prior year’s receipts.
“Our severance taxes continue to be really really strong,” Justice said. “No question, that is benefiting us and benefiting us in a good way. When we go back to construction on our pipelines this should rebound even stronger. Natural gas prices are nicely positioned right now.”
Areas that came in below estimates for November include the business and occupation tax, which came in at $1.9 million below estimates at $6.9 million. Tax revenue from tobacco products continues to perform poorly, coming in $200,000 below estimates for the month and 0.2 percent below prior year receipts. Year-to-date collections are just $100,000 above estimates, but 0.4 percent below receipts for the prior first five months of last fiscal year.
West Virginia is also seeing a drop off in State Road Fund collections, which is funded by gasoline taxes, the purchasing of vehicles, and license and registration fees. State Road Fund collections came in $37.9 million below estimates. Officials attribute this to a $40.2 million shortfall in federal reimbursements. All other collections came in $2.3 million above November estimates. State Road Fund revenues between July and November came in $95.2 million below estimates at $534.1 million.