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West Virginia set to end fiscal year with huge budget surplus

FILE - In this Wednesday, Jan. 8, 2020, file photo, West Virginia Governor Jim Justice delivers his annual State of the State address in the House Chambers at the state capitol, in Charleston, W.Va. (AP Photo/File)

CHARLESTON — With just a month remaining in fiscal year 2021, West Virginia ended May with another revenue surplus, giving the state a chance to reach the end of June with close to $400 million in surplus.

According to the monthly general revenue collections released by the Senate Finance Committee Tuesday, the state brought in $491 million in tax collections for the month of May that ended on Monday.

“These are things that we should report and these are things that we should flaunt from the standpoint of how West Virginia is doing,” said Gov. Jim Justice during his Tuesday coronavirus briefing at the State Capitol Building.

May revenue came in $152.2 million more than the $338.8 million estimate set by the Department of Revenue, 44.9 percent more than expected and 65.4 percent more than May 2020 tax collections.

Year-to-date collections for the final 11 months of the fiscal year were $4.492 billion, giving the state a $389.6 million surplus, 9.5 percent more than estimates and 12.6 percent more than the final 11 months of fiscal year 2020.

“We should all be so proud of how West Virginia is minding its store,” Justice said. “Absolutely, through our bond-rating agencies and on and on and on, this is so profound and it absolutely should be the No. 1 thing we’re carrying through the streets and reporting the health and goodness of what is going on in West Virginia. It’s good stuff.”

Tax revenues for May were largely driven by personal income tax collections. Justice moved the 2021 tax filing deadline from April 15 to May 17 to match a similar move by the federal government.

May income tax collections were $268.9 million, which was 90.2 percent more than the $141.4 revenue estimate and 113.6-percent more than May 2020 collections. Year-to-date collections were $2.1 billion, giving the state $134.8 million in surplus from personal income tax collections.

Consumer sales and use taxes for May was $149.8 million, which was 24.3 percent more than the $120.5 million estimate and 37.9 percent more than this time last year. Year-to-date collections were $1.358 billion, which was 7.1 percent more than the revenue estimate.

May corporate net income tax revenue was $9.5 million, which was $7.5 more than the $2 million revenue estimate. Year-to-date collections were $252.3 million, which was 104.3 percent more than the revenue estimate.

Despite two months of above-estimate tax collections, the severance tax on coal and natural gas came in below estimate. May collections were $23.4 million, which was 26.1 percent below the $31.7 million estimate.

Despite the dip, year-to-date collections of $211.1 million was 2.1 percent above the $206.8 million revenue estimate.

The 2021 fiscal year ends June 30 with the new 2022 fiscal year beginning July 1.

The Legislature passed a new general revenue budget for fiscal year 2020 beginning July 1. The new budget totals $4.495 billion, which includes $72.7 million in unappropriated revenue.

Half of any end-of-year surplus must go to the state’s rainy day fund. Any remaining surplus will go to fund items placed in the surplus section of the fiscal year 2022 budget, totaling more than $58 million in items cut from the original budget but will be restored. Surplus funding line items include restoring cuts to West Virginia University, Marshall University and other two-year and four-year colleges and universities.

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