CHARLESTON, W.VA. – The West Virginia Department of Revenue recently released General Revenue Fund numbers that show stronger May collections mostly due to a combination of timing and $26.7 million in gap-fill revenues; however, year-to-date collections remain significantly below estimates.
“Despite this slight uptick in revenues for May, we’re seeing it as more of an anomaly than a trend,” said Revenue Secretary Robert S. Kiss. “We are still assuming our worst case scenario and are hopeful of a better result, but we don’t know yet what June’s numbers will be. June is a significant revenue month for both income and severance taxes, two consistent shortfall areas for Fiscal Year 2016.”
May’s General Revenue Fund collections of nearly $314.7 million were 12.1 percent above prior year receipts and nearly $28 million above estimate. However, Kiss said May’s numbers reflect the use of various additional revenues – including diverted taxes and other revenues – to help close the current year fiscal gap. These additional revenues accounted for more than $26.7 million of total collections in May and nearly $137.1 million for the year-to-date.
In addition, appropriated excess lottery transfers exceeded estimate by $10.2 million in May and by $18.8 million for the year-to-date. This surplus will be offset by a deficit of the same magnitude during the month of June.
Kiss also said the solutions proposed by the governor for closing the current fiscal year gap – including mid-year budget cuts, gap-fill revenues and supplemental appropriations of Rainy Day and other one-time funds adopted by the Legislature during the regular and special sessions – appear to have closed the gap for Fiscal Year 2016 and accomplish a balanced Fiscal Year 2016 budget at the end of June.
Collections of interest include:
— Personal Income Tax: Collections rebounded from a dismal 18 percent decrease (i.e., $44.4 million shortfall) in April to a $27.6 million surplus in May with adjusted monthly receipts rising by 10.5 percent over the prior year. A significant portion of the gain in May was attributable to a carryover of deposits in early May that would normally be deposited in late April.
— Monthly personal income tax collections included an extra $10.6 million and cumulative collections included an extra $42.4 million that were retained following the passage of SB419.
— Monthly personal income tax refund payments totaled $27.2 million in May, an increase of 29.7 percent from the prior year. Cumulative income collections were still nearly $37.7 million below estimate and more than 3.1 percent below prior year adjusted receipts.
— Severance Tax: Collections totaled nearly $32.8 million for the month, an amount that was $8.3 million below estimate. Cumulative General Revenue Fund Severance tax collections of $236.4 million were $167.1 million below estimate and 35 percent below prior year receipts.
— Consumer Sales Tax: Collections of $100.6 million were 9.7 percent above prior year receipts, but still $7.2 million below estimate. Cumulative adjusted collections of more than $1.1 billion were $31.7 million below estimate and slightly below prior year receipts.
— B&O Tax: Collections totaled $14.5 million, an amount that was more than $5.0 million above estimate and more than double prior year receipts. The monthly surplus largely offset a prior month deficit due to some carryover of deposits due on the last day of April to early May. Cumulative B&O Tax collections of more than $108.6 million were $1.5 million above estimate and 2.4 percent above prior year receipts.
— State Road Fund Tax: Collections of more than $55.2 million fell short of the May estimate by nearly $22.5 million, and fell short of prior year receipts by 5.4 percent. Cumulative collections of $627.8 million were nearly $23.9 million below estimate and 5.6 percent below prior year collections.