CHARLESTON, W.VA. – The West Virginia Department of Revenue released revenue numbers for the month of December and projected a $353 million deficit for the current fiscal year Wednesday, January 6.
Revenue Cabinet Secretary Robert S. Kiss attributed the new estimate to what continues to be a rapid decline in severance tax revenue that will begin to have a notable impact on other critical revenue streams such as personal income tax and sales tax.
“We are working very closely with the Governor’s Office to right this ship,” Kiss said. “Governor Tomblin is committed to ending the fiscal year with a balanced budget and will share his responsible plan with the state next week.
“We are optimistic and we are prepared,” Kiss said.
A week out from the start of the 2016 Legislative Session, low prices continue to plague the energy industry affecting coal, oil and gas revenues in the Mountain State.
In December, General Revenue Fund collections of $335.1 million were 10.2 percent below last year’s receipts and $43.5 million below estimate. Cumulative collections of more than $1.85 billion were nearly $158 million below estimate and 6.1 percent — $120.8 million — below prior year receipts. The biggest deficits for the month were in collection of Severance Taxes ($15.6 million), Personal Income Tax ($9.3 million), Sales Tax ($8.3 million) and Corporation Net Income Tax ($7.5 million).
The biggest deficits for the year-to-date collections were in Severance Tax ($94.4 million), Personal Income Tax ($31.4 million), Sales Tax ($17.5) million and interest income ($7.7 million).
Collections of interest in December:
- Personal Income Tax: Collections were 1.4 percent below prior year receipts in December due to a decline of 1.1 percent ($1.3 million) in monthly withholding tax receipts, and a decline of more than 49 percent in nonresident withholding tax receipts ($5.3 million). Cumulative collections were down 0.2 percent from prior year receipts and $31.4 million below estimate.
- Consumer Sales Tax: Collections were 0.7 percent below prior year receipts and $8.3 million below estimate. After discounting gains from both additional local sales tax collections and a lower monthly transfer to the SBA, net collections were down more than 3 percent for the month. Cumulative adjusted collections were just 0.8 percent ahead of last year’s collections.
- Corporate Income Tax: Collections totaled $26.4 million and cumulative collections totaled $83.4 million. Monthly collections were nearly $7.5 million below estimate and nearly 39 percent below prior year receipts. Weakening corporate profits and the impact of final phase-out of the Business Franchise Tax component both weighed negatively on quarterly estimated payments for the month. Cumulative receipts were $5.5 million below estimate and 25.5 percent below prior year receipts.
- Tobacco Product Excise Tax: Collections totaled nearly $7.5 million in December and $0.3 million below estimate. Cumulative collections of nearly $52 million were $0.1 million below estimate and 2.6 percent below prior year receipts.
- B&O Tax: Collections of $7.6 million were $1.1 million below estimate. Year-to-date collections of $54.3 million were $1.6 million above estimate and 3.6 percent ahead of prior year receipts.
- State Road Fund: Collections of more than $66.9 million were nearly $15.7 million above estimate, but 17 percent below prior year receipts. Motor fuel tax collections of $45.1 million were $11.8 million above estimate in December, but more than 20 percent below prior year receipts. Cumulative State Road Fund collections of more than $359.6 million were $3.2 million above estimate, but 4.1 percent below prior year receipts.
For a detailed look at West Virginia’s revenue reports, visit www.budget.wv.gov/reportsandcharts/revenuereports.