Higher coal, natural gas prices contribute to West Virginia’s November tax revenue surplus
CHARLESTON — People across the U.S. might be paying higher prices for energy, but coal and natural gas severance tax revenue in West Virginia played a large role in November’s budget surplus.
According to the West Virginia State Budget Office, the state collected $435.6 million in tax revenue for November, 25.3 percent more than the $347.6 million officials in the Department of Revenue estimated for the month, giving the state an $88 million surplus for the month. November’s tax revenue collections outpaced collections this same time last year by 27.2 percent.
According to Gov. Jim Justice, November’s tax revenue collections were the highest on record since last November.
“West Virginia is writing the comeback story of all time, and these unprecedented surplus numbers are proof that this rocket ship ride that I promised is real,” Justice said in a statement Wednesday. “We’re witnessing West Virginia’s greatest chapter of all time unfold before our eyes and there’s much more to come.”
West Virginia’s year-to-date tax collections for the first five months of fiscal year 2022, beginning on July 1, were more than $2 billion, 15.6 percent ahead of projections. The original estimate for July through November was $1.7 billion. November’s numbers give the state a surplus of $271.4 million.
Helping lead the way on tax revenue for November was the coal and natural gas severance tax. The state collected $75.4 million in severance tax in November, 129 percent more than the $32.9 million estimate, providing $42.5 million in surplus revenue. According to state tax officials, this is the highest monthly severance tax revenue on record. Year-to-date severance tax revenues of $191.6 million were 82.1 percent more than the $$105.2 million estimate, providing a year-to-date surplus of $86.4 million.
According to the governor’s office, natural gas prices are four times higher this year than this same time last year. The Wall Street Journal reported Tuesday some coal-fired power plants are keeping their coal piles at the lowest levels since the 1970s due to the higher price of thermal coal.
According to the U.S. Energy Information Agency, the spot price for natural gas rose $2.75 per million BTU last November to $5.05 per BTU one week later on the Henry Hub scale. According to S&P Global Platts, coal prices for coal used in power plants rose to $100 per short ton, a 12-year high.
Personal income tax collections for November were $169.8, which was 13.9 percent more than the $149.1 million estimate for the month, adding $20.7 million in surplus revenue. Year-to-date severance tax collections were $854.9 million, which was 11.5 percent more than estimates. The consumer sales and tax came in at $149.2 million in November, which was 14.2 percent above the $130.7 million estimate. Year-to-date collections were $633.3 million, or 7.7 percent above estimate.
November corporate net income tax revenue was $6.8 million, bringing in $5.3 million more than the original $1.5 million estimate. Year-to-date collections were $93.7 million, nearly 87% more than the $50.2 million estimate. Justice said the state’s revenue growth rate of 27.2 percent, the highest rate since 2004.
“We’ve diversified our economy, tourism is booming, roads are getting paved everywhere you turn, we didn’t forget our energy industry, we took care of our elderly and our hungry, we made education our centerpiece, and we did all this without wasteful spending and growing government,” Justice said.
Steven Allen Adams can be reached at firstname.lastname@example.org.