CHARLESTON – The West Virginia Department of Revenue released revenue numbers for the month of September.
As of Sept. 30, general revenues are more than $60 million behind estimates, a figure that has grown quickly from a $12 million deficit at the end of August, according to the report.
Specifically, General Revenue Fund collections for August were slightly more than $379 million and cumulative collections totaled nearly $929.8 million, the report showed.
In the report, September collections were $55.5 million below estimate and the state’s cumulative deficit rose to $67.8 million. September collections also fell 8.4 percent below prior year receipts and cumulative collections fell 4.9 percent below prior year receipts.
Revenue Cabinet Secretary Robert S. Kiss said energy prices continue to plague the state’s energy sector. Accordingly, West Virginia’s revenues are taking a tremendous hit, he said.
“Tax collections continue to be hurt by low energy prices and the consequences associated with the general lack of demand for natural resource products relative to their supply. We have never seen this level of erosion in severance tax revenue at this rapid pace. August numbers had us $12 million below estimate and 30 days later, we’re behind by more than $60 million. It’s unprecedented.”
Last month’s Severance Tax collections of slightly more than $24.3 million were $23.4 million below estimate and more than 23 percent below prior year receipts. Cumulative collections of $39.1 million were $43.4 million below estimate and nearly 42 percent below prior year receipts.
Coal production is trending down by roughly 15 percent, a decrease in line with original expectations. However, the decline in energy prices is much more severe in magnitude. The 12-month trailing trend for natural gas prices declined from $3.72 per Mcf as of August 2014 to just $1.99 per Mcf as of August 2015. Beginning in August 2015, the average price has decreased to less than $1 per Mcf. Average coal prices decreased from $71 per ton for the 12-month period ending as of August 2014 to $61 per ton for the 12-month period ending as of August 2015. The average price for the July-August 2015 period was just slightly above $51 per ton.
Lower incomes associated with declining energy prices also are beginning to contribute toward lower income tax and sales tax collections.
September Personal Income Tax collections of nearly $185 million were $28.1 million below estimate and 9.4 percent below prior year receipts. Cumulative collections of $440.9 million were $18.9 million below estimate and 0.4 percent below prior year receipts. Withholding tax receipts fell by 9.2 percent in September and estimated tax payments fell by 7.9 percent. Total first quarter withholding tax collections were down by 1.6 percent and estimated tax collections were down by 2.4 percent.
Other collections of note include:
· Consumer Sales Tax collections totaled nearly $101 million in September and $288.9 million for the year to date. September receipts fell $4.4 million below estimate and cumulative collections fell nearly $3.9 million below estimate. Cumulative collections were also 1.6 percent below prior year receipts. After adjustments for alterations in the timing of receipts and other factors, the overall growth rate in sales tax was no higher than 0 percent for September and 3 percent for the year to date.
· Corporate Income Tax general revenue collections totaled $34.7 million in September and $45.9 million for the year to date. In addition, another $1.075 million was transferred by statute to the West Virginia Public Port Authority in September. September collections were nearly $0.3 million below estimate and 19 percent below prior year receipts. Cumulative collections were nearly $0.9 million above estimate but more than 19 percent below prior year receipts. The decrease in tax receipts was largely attributable to the recent phase-out of the Business Franchise Tax component.
For a detailed look at West Virginia’s revenue reports, please visit www.budget.wv.gov/reportsandcharts/revenuereports
• Meanwhile, a new report indicates coal use in America had dropped 21 percent since 2005.
America’s reliance on wind, solar and other renewable sources of energy has reached historic levels and is poised to make even greater gains in the near future, according to new report by the Natural Resources Defense Council.
NRDC’s Third Annual Energy Report, “A Tectonic Shift in America’s Energy Landscape,” (http://www.nrdc.org/energy/energy-environment-report/default.asp) found that the energy sector in the United States emitted less dangerous carbon pollution last year than in 1996, with a full 10 percent reduction over the past decade. Meanwhile, coal and electricity consumption are down nationwide, while oil use today is lower than in the early 1970s, the report shows.
“The economic and environmental performance of America’s energy systems has never been better, and the single most important contributor to these positive trends is energy efficiency, the largest and least expensive way to meet the nation’s energy needs,” said Ralph Cavanagh, co-director of the NRDC energy program. “However, America can, should, and must do more to increase our efforts to help stabilize the world’s climate.”
The report cites two important U.S. advances this year in the global fight against catastrophic climate change: the Obama administration’s August release of the Clean Power Plan to limit power plant pollution and California‘s new climate legislation (SB 350 signed yesterday). California has set the world’s strongest combined targets for energy efficiency, renewable energy and transportation electrification, a path that other states could follow. “These developments, along with the good energy news noted in the report, offer hope for significant progress in the global climate negotiations scheduled for December in Paris,” Cavanagh said.
Sierra Martinez, report co-author and NRDC’s California Energy Project legal director, said the report shows the United States was relying on an unprecedented amount of renewable energy by the end of 2014.
“The amount of renewable energy from wind turbines, solar panels, and other technologies now equals roughly 10 percent of the nation’s energy use,” Martinez said. “That’s like powering the world’s largest economy for more than a month without using any pollution-spewing coal, oil, or natural gas, and without additional harm to our lands, waters, and wildlife that is associated with extracting fossil fuels.”
The report also notes the country is already two-thirds of the way toward meeting President Obama’s goal of cutting 3 billion tons of carbon pollution by 2030 through his administration’s efficiency standards for appliances and federal buildings.
Other key findings:
ELECTRICITY: Thanks in large part to efficiency, electricity consumption rose a mere 7.5 percent from 2000 to 2014 even as the U.S. population grew at nearly twice that rate. This is the
first time that our electricity use has grown more slowly than our population for an extended period.
ENERGY EFFICIENCY: Efficiency remains America’s largest and most productive energy resource. The amount of energy required to produce an inflation-adjusted dollar of economic output dropped by almost 60 percent between 1970 and 2014, thanks to smarter energy use.
RENEWABLE ENERGY: Wind power continues to dominate the nation’s renewable energy growth, contributing roughly two-thirds of generation from our renewable resources other than hydropower. Wind power production scored a 33-fold increase from 2000–2014. Meanwhile, solar power doubled its output over the previous year (for the fourth year running) and, for the first time ever, eclipsing the annual generation of the nation’s geothermal resources.
OIL: Although the amount of oil used in U.S. vehicles, homes, and businesses rose negligibly in 2014 (about 0.5 percent), the total still was more than 13 percent below its 2005 peak. In fact, oil use today is slightly lower than in 1973, when the nation’s economy was about one-third its current size. Recent fuel economy and clean car standards have helped reduce our dependence on oil imports. Providing more alternatives to driving, like public transit, and further accelerating electric vehicle sales could save the United States nearly 4 billion barrels of oil annually by 2035 – which, in one year, would almost equal how much oil the government estimates can ever be recovered from drilling all our offshore waters from Florida to Maine.
COAL: America burned less coal in 2014 than in 1990, and U.S. coal use is down more than 21 percent from the peak year of 2005, primarily due to the movement of utilities away from aging and uneconomical coal-burning power plants. For the first time in two decades, domestic coal production dropped below 1 billion short tons in 2014, reflecting the power sector’s move to cleaner sources to generate electricity.
NATURAL GAS: Although natural gas raised its market share to a 40-year high in 2012, exceeding 30 percent of electricity generation, the figure was below 28 percent last year; it is likely to surpass 30 percent again in 2015. In April 2015, U.S. power plants for the first time generated more electricity from natural gas than coal.
NUCLEAR: Nuclear power remained below 20 percent of total electric generation for the fifth consecutive year in 2014 – and was below the average for 2006-2011.
FOR MORE INFORMATION: Read the full report online at http://www.nrdc.org/energy/energy-environment-report/default.asp or read Ralph Cavanagh’s blog online at http://switchboard.nrdc.org/blogs/rcavanagh/