Lawmakers get details on West Virginia’s fiscal year 2019 revenue growth
CHARLESTON — Lawmakers attending Monday’s July legislative interim meetings heard from representatives of the state Department of Revenue about West Virginia’s record-breaking general revenue growth for the fiscal year ending in June.
Revenue Secretary Dave Hardy told the Joint Standing Committee on Finance, comprised of senators and delegates, that the state saw $511 million in revenue growth for fiscal year 2019.
“For fiscal year 2019, we should all be very, very happy collectively here today about how well we did,” Hardy said.
Hardy said the $511 million is a 12 percent increase in revenue growth over fiscal year 2018. The state estimated revenue growth of $4.748 billion for the last fiscal year and received $4.756 billion in revenue – $8.178 million more than what was estimated.
“In order to get that kind of revenue growth, it can’t just be one thing,” Hardy said. “It has to be all your revenue streams clicking.”
Compared to the 2018 fiscal year, corporate net income tax revenue was up 79.9 percent in fiscal year 2019. That’s approximately $89 million more than 2018.
Severance tax revenue from the mining of coal and natural gas production was up 33.7 percent, more than $116 million above last year. Consumer sales tax revenue was up 9.9 percent, coming in at more than $123 million. Personal income tax revenue was 9.2 percent more than the prior fiscal year, or $177 million.
“People are buying a lot of things,” Hardy said. “Business activity is up, the personal income tax means that people are working.”
While revenue officials cite construction growth among the largest drivers of the tax collection numbers, Hardy pushed back on the idea that the construction industry was the sole driver.
“If anyone would say that it’s one thing, for example, the pipelines perhaps, that are making us have these excellent numbers, that’s incorrect,” Hardy said. “It’s a combination of a whole lot of things to allow us to get to this place.”
When compared to the first revenue estimate submitted by Gov. Jim Justice in January 2018 for fiscal year 2019, revenues increased $316 million above that original estimate. The governor’s office increased the revenue estimates four times during the fiscal year. The most recent revenue estimate increase was in June.
Turning to fiscal year 2020, which started July 1, Hardy said the state has submitted its revenue numbers to the three main bond rating agencies: Moody’s, Standard and Poor’s and Fitch. Moody’s recently praised the state for its revenue growth.
In June, the U.S. Department of Commerce praised West Virginia for leading the nation in its personal income growth rate of 5.6 percent for the first three months of 2019, a rate that eclipsed the national rate by 2.2 percent. According to the National Association of State Budget Officers, West Virginia was one of five states to get to double-digit revenue growth between 2018 and 2019.
Also in June, Justice announced that the first 10 months of fiscal year 2019, starting July 2018 and ending in May, saw 11.5 percent growth in the state general revenue tax collections. Justice called this the highest growth rate in the country.
Steven Allen Adams can be reached at firstname.lastname@example.org.