Tax revenue collections continue to climb
For the second month in a row, West Virginia’s numbers come in above budget estimates
CHARLESTON – For the second month in a row, West Virginia’s tax revenue collections came in above budget estimates.
According to Governor Jim Justice, August general revenue fund collections came in at more than $33.4 million above estimates, or $353.2 million. That’s 14.9 percent more than last August.
“I am telling you this is the story,” Justice said. “This is the story of greatness within our state. This was Republican leadership all across the board. This is the story.”
Justice, joined by officials with the state Department of Revenue, Senate President Mitch Carmichael, and newly-elected House Speaker Roger Hanshaw, made the announcement at a press conference at the State Capitol Building Tuesday.
Once again, Justice had staff break out the Hawaiian leis to celebrate, but also to throw the numbers back in the face of naysayers who questioned whether the state could keep the positive revenue numbers.
“What is Justice going to do if the numbers don’t come in as good,” Justice said. “There’s truth to the numbers when you look back and say where were we going to go and what were we going to do. Low and behold, these are the numbers now.”
According to Revenue Department data, year-to-date collections — beginning in July when the new fiscal year started – were $65.8 million above estimates, or more than $665.9 million total. Officials credit growth in severance tax revenue, as well as the consumer sales and personal income tax revenue.
“I told you that severance taxes were going to rise. One of our leading publications said coal was dead,” Justice said. “There’s a hell of a lot of coal miners working out there today that don’t believe in any way that coal mining isn’t going to come back.”
The state collected $50.1 million in severance tax revenue from coal, natural gas, timber, and other sources. That’s $16.7 million above estimates and 75.1 percent ahead of last fiscal year. Coal severance tax revenue was the leader, with coal production up 3.2 percent over last year.
“I can tell you that coal severance tax revenues were the major source of the increase in severance tax collections,” Justice said.
August consumer sales and use tax collections came in at $119 million, which was $7.2 million above estimates and 12.9 percent above last year. Personal income tax collections came in at $139.2 million.
Justice points to growth in private sector employment as to why consumer sales and personal income tax revenues are up. Private sector employment grew 1 percent over last year, with 58 percent of gains coming from the goods-producing sector. For August, employee withholding tax revenues were up 8.8 percent, and up 11 percent year-to-date.
“It doesn’t mean we’re across the finish line,” Justice said. “We have a lot of people who are still hurting that we want to try to help in every way. These revenues enable us to help in every way. It doesn’t mean we’re now on easy street.”
Dave Hardy, secretary of the Department Revenue, pointed out that the state was $500 million in the red 20 months ago. When Justice raised the revenue estimate by $58 million for the proposed fiscal year 2019 budget, Hardy was skeptical. Now that the $65.8 million year-to-date revenue is on top of the original $58 million project, Hardy said is a believer.
“We haven’t done this well in a really long time,” Hardy said. “Behind these numbers there is a story: people are going back to work. These personal income tax numbers are absolutely spectacular.”