December revenue numbers up in West Virginia
First half of fiscal year below estimates
CHARLESTON — Tax revenue numbers in the state for December 2019 came in $6.9 million above estimates, though year-to-date tax collections for the first six months of fiscal year 2020 remain lower than anticipated.
According to revenue numbers released by Gov. Jim Justice Thursday, tax collections for December came in at $428.2 million, or 1.6 percent above the December estimate of $421.3 million. That comes out to a $6.9 million surplus for the month. December 2019 also came in 1.2 percent ahead of December 2018 numbers.
December marks the halfway point of fiscal year 2020, which started July 1, 2019. Year-to-date tax collections came in at $2.203 billion, which was 1.4 percent below estimates of $2.236 billion — $33.4 million below estimates. Tax collections for the last six months came in 1.4 percent lower than the same time period in 2018.
“Our state is still in great financial health and we’re doing well in lots of areas,” Justice said in a statement. “That said, we are always looking at all of our numbers every single day because we know that even though we’ve done so much, there are always areas where we can continue to improve.”
Department of Revenue officials place the blame on the slightly lower revenue numbers on the energy sector. December severance tax collections came in just over the estimate at $43 million, but year-to-date collections from natural gas and coal severance of $136.1 million came in $37.8 million below estimates — a 5.1 percent drop and 34.9 percent below fiscal year 2019 numbers.
“The cumulative shortfall was due to a significant slump in energy prices, particularly for natural gas,” the report stated. “Coal sales have also recently slowed due to both a global economic slowdown with lower steel demand and stiffer domestic competition from natural gas in the electric power generation market.”
Personal income tax collections were $174.8 million for December, 1.77 percent below estimates of $177.9 million, but 2.9 percent ahead of December 2018 collections. Year-to-date collections of $973.6 million came in $33.6 million below estimates, but 1 percent ahead of 2018 collections.
While consumer sales tax collections came in $1.1 million below estimate for December, the $127.3 million in collections came in 2.6 percent ahead of last year’s collections. Year-to-date collections of $683.1 million came in $2.8 million below estimate, but 1.6 percent above 2018 numbers.
Business and occupation tax collections saw a 50 percent increase above the estimate for December, coming in at $17.6 million. Year-to-date numbers came in at $67.4 million, 19 percent above estimates.
“Monthly collections were up 121 percent from the prior year largely due to a large carryover of deposits due at the end of November to early December,” according to the release.
Corporate net income tax collections were down for the month, but up for the first half of the fiscal year. December numbers were $30.4 million — $2.6 million below estimate — and year-to-date numbers were $97.5 million, or $23.3 million above estimate.
During the December legislative interim meeting, Department of Revenue Secretary Dave Hardy said mid-year budget cuts that the administration was making preparations for would likely not happen as long as revenues did not stray too far from estimates. Justice said the reason for the estimate being slightly off was due to the surplus brought in from fiscal year 2019 that ended in June.
“The thing to remember is that most of the surplus we saw in the historic FY 2019 numbers was built into the FY 2020 budget, and we are pacing close to those record-setting numbers,” Justice said. “Secretary Hardy and his team at the Department of Revenue are going to stay on top of it.”
Steven Allen Adams can be reached at email@example.com