Justice announces historic revenue numbers
CHARLESTON – As Gov. Jim Justice prepares for the start of the legislative session and his third State of the State address, he has good tax revenue numbers brag about.
Justice, joined by officials with the state Department of Revenue, announced at a press conference Tuesday the tax revenue numbers for the first six months of fiscal year 2019 were record-breaking.
“I think the best way to qualify this is just this: the biggest in history,” Justice said. “That’s pretty big.”
In the 2019 fiscal year, which started July 1, tax revenue for the first six months came in at $185 million above estimates. Since April 1, the state has brought in $234.4 million above estimates.
“I think we’ve made the right moves, and we continue to make moves that move us forward,” Justice said. “The numbers are unbelievable.”
December revenue numbers also were record-breaking, coming in at $44.8 million above estimates.
Driving the December numbers was corporate net income tax revenue, which came in at 107 percent higher than last December. Many businesses wait to pay their taxes until the end of the year to write those taxes off the following year.
Severance tax revenue came in about 73 percent higher than December of last year, driven by coal exports. Justice said exports are up by 44.5 percent. Consumer sales tax revenue came in 12.4 percent higher than December of last year.
“That’s a tremendous indicator of how you’re growing and what you’re doing,” Justice said. “The whole gist of everything I can say to you today would be our coal miners are back to work and our exports are ringing the bell.”
Deputy Revenue Secretary Mark Muchow said December, while not typically the highest month for revenue, is usually one of the top months.
“It’s a high month because it’s a quarterly month,” Muchow said. “The estimates of revenue reflect the expectation.”
Muchow said the passage of the Roads to Prosperity constitutional amendment combined with natural gas pipeline construction has driven much of the tax revenue growth the last six months. Muchow expects pipeline construction projects to start slowing down.
“I think the highways program is moving along, but we still have several years to go,” Muchow said. “The bigger factor in the current year in terms of construction is the pipelines.”
While the tax revenue is good, there are already demands being placed on that money. Half of all budget surpluses are deposited into the Rainy Day Fund by state law. Justice proposed last year a 5 percent pay raise for teachers, school service personnel and public employees on top of the 5 percent these groups received last year. He also proposed putting $100 million in the Public Employees Insurance Agency for long-term stabilization.
Lawmakers have additional plans, such as exempting Social Security earnings from taxation and creating a free or reduced community and technical college education program. Justice said he would have more details on how to pay for all these ideas in today’s State of the State speech.
“It may look difficult to do…but I’ll outline every bit of that,” Justice said.