W.Va. tax revenue decline continues
CHARLESTON – West Virginia’s tax revenue slide is continuing as October’s collections fell about $8 million below estimates.
Collections of personal income, consumer sales and business and occupation taxes were all below estimates, Deputy Revenue Secretary Mark Muchow tells media outlets.
Personal income and consumer sales taxes are the state’s biggest sources of tax revenue.
Natural gas production boosted severance tax collections above estimates. But Muchow says it wasn’t enough to offset the declines.
October’s tax collections totaled about $313.5 million. Overall tax collections in September were about $2 million below estimates.
Tax collections for the first four months of the fiscal year totaled $1.29 billion, $42.5 million below projections.
“The biggest issue is a lack of significant growth in wages and salary income from this time a year ago to now,” Muchow said.
Personal income tax collections in October were $7.78 million below projections, while consumer tax collections were $347,000 below estimates.
The state collected $34.9 million in severance taxes in October, 16 percent above estimates.
“For the most part, it’s due to the natural gas industry, and growth in production, which has had average increases in excess of 3 percent the last three years,” Muchow said.
Meanwhile, state road fund collections totaled $59.76 million in October, $2.89 million above estimates. The road fund is funded by gasoline taxes, motor vehicle privilege taxes and vehicle registration fees.
“People are buying new cars,” Mucho said. “That’s not just a state of West Virginia trend, that’s a national movement upward in new vehicle sales.”
Muchow said that the state would need a 3.6 percent growth in revenue through the rest of the fiscal year to meet estimates. The state could face a budget shortfall of between $10 million and $60 million at the end of the fiscal year.
“We’ll have to gauge how things occur in the coming months,” he said.
Muchow said that it’s unclear whether predictions of improved growth by some economic forecasts might come true.
“Forecasts would suggest economic growth is on the horizon. The question is, how far away is the horizon?” he said.