CHARLESTON, W.Va. (AP) — West Virginia’s tax collections for February exceeded estimates by $10.3 million but still left the government’s projected budget shortfall at $123 million for the current fiscal year, according to revenue data released Monday.
Sales, personal income and severance taxes — the three biggest collection categories — all exceeded February estimates, Deputy Revenue Secretary Mark Muchow said. He called the increase in payroll tax withholding by almost 1 percent over February last year, “a slight positive trend.”
Severance taxes for extracting coal, oil, natural gas and timber totaled $262.5 million through eight months of the fiscal year that ends June 30. After “a very rough start,” which was attributed to a downturn in coal, Muchow said he now expects continuing gains above budget estimates.
“Severance tax is our most positive tax trend this year,” Muchow said. “We exceeded estimate, and for the month of February had $28.8 million for the month. That was $2.3 million above estimate, 14.4 percent higher than last year. So that’s all good. Now a good part of that growth comes from natural gas. Natural gas prices have improved recently.”
Coal prices have also rebounded from last year’s lows and some West Virginia mines have been hiring back workers.
West Virginia personal income taxes have brought in $1.91 billion over eight months with sales taxes adding $1.285 billion.
Corporation income and business franchise taxes have added $137.4 million so far this year. However, with refunds, the state actually paid out $1.845 million to corporations and businesses in that category in February.
West Virginia lawmakers eliminated the business franchise tax effective in 2015 with only residual collections now, according to the Department of Revenue.
The Justice administration has identified $120 million of unspent funds to offset the projected budget deficit and avoid tapping the state’s rainy day fund, Revenue Secretary Dave Hardy said. That will help protect the state’s bond rating, he said.
Lawmakers and the governor’s office are considering tax revisions to help close a projected $500 million budget deficit for the fiscal year that starts July 1.
Information from: The Charleston Gazette-Mail, http://wvgazettemail.com.