CHARLESTON — The West Virginia Department of Revenue has released numbers for the month of June, officially ending its fiscal year with a balanced budget.
General Revenue Fund collections for the past year totaled more than $4 billion, about $60 million below official estimates set in November 2013.
Governor Earl Ray Tomblin took action to both reduce spending and partially fill the gap with one-time revenues. In the beginning of fiscal year 2015, he continued a hiring freeze, which when combined with a mid-year budget cut, meant an expenditure savings of more than $38.9 million. One-time revenues included a $7.5 million appropriation by the Legislature, the use of $12.6 million in unappropriated balances and the use of $3 million from the Income Tax Refund Reserve Account for tax refund payments. The net result is a small year-end budget surplus of about $1.3 million.
“Because of our long-term planning, we knew this would be a difficult budget year,” Gov. Tomblin said. “With the challenges our energy industries are facing, it became even tougher. But because of our fiscally responsible policies in the past and the current budget year, we were able to manage the shortfall without making radical cuts and, in fact, were able to realize some amount of savings that will become more definite in the coming month.”
Revenue Secretary Robert S. Kiss attributed the shortfall to a significant drop in energy prices for both natural gas and coal.
“If not for a sharp dip in energy prices, we would have met our estimates,” Kiss said. “As a result, we had to do some maneuvering to compensate for the losses in severance tax revenue. The Governor put a strong plan in place from the start and it served us well in the end.”
General Revenue Fund collections for the month of June totaled $439.3 million, which was $21.6 million below estimates.
Highlights from the General Revenue Fund collection performance for the completed fiscal year:
PERSONAL INCOME TAX
After declining by 2.2 percent in Fiscal Year 2014, Personal Income Tax collections grew by 10.4 percent in Fiscal Year 2015, a net gain of nearly $173 million. Wage and salary withholding tax collection growth improved from just 0.7 percent in the prior year to 5.1 percent in fiscal year 2015. Estimated income tax payments grew by more than 16 percent and nonresident withholding tax payments jumped by more than 21 percent from the prior year. A greater than 30 percent increase in natural gas production stimulated both income growth and growth in estimated tax and non-resident withholding tax payments. The Personal Income Tax accounted for roughly 43.8 percent of total General Revenue Fund collections for the year.
CONSUMER SALES AND USE TAX
Fiscal Year 2015 Consumer Sales Tax collections totaled nearly $1.228 billion. Collections rose
$55 million from prior year receipts. Despite the revenue growth, sales tax collections still fell short of estimate for both the month and the year. The Consumer Sales Tax accounted for nearly 29.3 percent of General Revenue Fund collections in Fiscal Year 2015.
Fiscal year 2015 Severance Tax collections totaled nearly $414.2 million. General Revenue Fund receipts fell by more than 15 percent from the $488.7 million collected in the prior fiscal year. Coal production levels were largely unchanged from the prior fiscal year and natural gas production rose by more than 30 percent. However, average coal prices fell by roughly 10 percent and average natural gas prices dropped by roughly 30 percent from the prior year. These factors lead to the decline in tax collections for the year. Monthly Severance Tax collections of $50.5 million were $2.4 million below estimate and 38 percent below prior year receipts. Cumulative collections were $60.4 million below estimate and 9.8 percent below prior year adjusted receipts (adjusted to reflect timing changes for local tax distributions). The Severance Tax accounted for roughly 9.9 percent of total General Revenue Fund collections in Fiscal Year 2015.
CORPORATION NET INCOME TAX
Fiscal Year 2015 Corporation Net Income Tax collections for the State General Revenue Fund totaled $186.1 million, a decrease of $17.4 million from prior year collections. The decline in revenues was largely attributable to the continuing phase-out of the Business Franchise Tax component. June collections of $30.1 million were $10.2 million below estimate and 7 percent below prior year receipts. The Corporation Net Income Tax accounted for roughly 4.4 percent of total General Revenue Fund collections in Fiscal Year 2015.
Additionally, State Road Fund revenues for the fiscal year totaled nearly $743 million. Collections exceeded both the annual estimate by more than $41.4 million and prior year collections by nearly $8.3 million.
Secretary Kiss, Deputy Secretary Mark Muchow and State Auditor Glen Gainer will host a conference call for media today at 1:45 p.m. To participate, please call (304) 957-6999 and enter conference ID 6835738 when prompted. No passcode is required.
For a detailed look at West Virginia’s revenue reports, please visit www.budget.wv.gov/reportsandcharts/revenuereports.