CHARLESTON, W.VA. – The West Virginia Department of Revenue released revenue numbers for the month of October on Tuesday, November 3.
As of October 30, the state’s cumulative general revenue collections were $91.6 million behind estimates, a figure that has grown quickly from a $12 million deficit at the start of the fiscal year. Specifically, October General Revenue Fund collections totaled nearly $299.7 million, an amount that was 9.3 percent below prior year receipts and $23.8 million below estimate. Cumulative collections of nearly $1.23 billion were 6 percent below prior year receipts.
Revenue Cabinet Secretary Robert S. Kiss said with a few exceptions, most revenue sources actually either met or slightly exceeded estimates in October, but low energy prices continue to plague the state’s energy sector and severance tax collections continue to take a hit.
Additionally, because local tax distributions happen annually in October for the oil and gas industry, only $1.25 million out of $24 million in net collections remained in the state’s severance tax coffer. Of the nearly $22.9 million in local severance tax pay outs, more than $17 million was paid out in the form of natural gas and oil severance tax distributions for counties and municipalities. This was a $2.4 million increase from the prior year. That amount was based on calendar year 2014 activities when energy prices were much higher. Four counties – Doddridge, Harrison, Wetzel and Marshall – received the bulk of the proceeds from the allocation.
“October is a unique month because of annual oil and gas distributions,” Kiss said. “But it doesn’t change the fact that we continue to see a rapid decline in severance tax collections. It is a supply versus demand problem like we’ve never seen before. The hope is that it will begin to improve heading into winter, but in the event that it doesn’t happen as quickly as we hope, we are making responsible adjustments across all of state government to be prepared.”
As of the end of September, year-to-date coal severance tax collections were down by more than 41 percent and natural gas severance tax collections were down more than 35 percent. The largest percentage of revenue collection decreases was attributable to oil, which was down 59 percent, and other natural resources, which was down 68 percent.
By the end of October, cumulative severance tax collections were down 51 percent and natural gas prices fell by more than 50 percent in the past year while coal prices declined by more than 10 percent. Cumulative General Revenue Fund severance tax collections of slightly more than $40.3 million were $68.4 million below estimate.
Other collections of interest:
— Personal Income Tax: October collections totaled nearly $130.4 million, an amount that was more than $2.3 million above estimate and 6.6 percent ahead of prior year receipts. The gain in revenue was attributable to the combination of higher-than-anticipated return payments and lower-than-anticipated refund payments. However, monthly wage and salary withholding tax receipts were more than $4 million below estimate and just 0.3 percent ahead of prior year receipts due to sluggish employment trends with significant job losses particularly in energy-related activities.
— Consumer Sales and Use Tax: Collections totaled $103.5 million in October and nearly $392.5 million for the year-to-date. Last month’s collections slightly exceeded estimate, but were still 2.2% below prior year collections. Cumulative collections were still $3.8 million below estimate and 1.8 percent below prior year receipts. The lower net collections in October were partly attributable to the quarterly payout of local municipal sales tax revenues totaling nearly $7.9 million to 16 municipal governments.
— Corporation Net Income Tax: Collections totaled more than $10.3 million and cumulative collections totaled $56.2 million. Monthly collections exceeded estimate by $1.8 million and cumulative receipts exceeded the cumulative estimate by $2.7 million.
— State Road Fund: Collections were lower than prior year receipts in October due to the combination of weaker automobile sales, some decline in off-road fuel sales and significant revenue timing alterations for both license fees and motor fuel tax collections. Monthly collections of slightly more than $44 million were nearly $0.2 million below estimate and 29 percent below prior year receipts.
For a detailed look at West Virginia’s revenue reports, visit www.budget.wv.gov/reportsandcharts/revenuereports.