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W.Va. ends fiscal year with record-breaking $1.3B surplus

CHARLESTON — Blowing all previous records out of the water, West Virginia is sitting on more than $1.3 billion in surplus tax revenue as the state begins the new fiscal year.

According to a report released Friday by the Senate Finance Committee, West Virginia ended fiscal year 2022 on Thursday with $5.9 billion, 43.6 percent more than the $4.6 billion estimate amended in January by the state Department of Revenue. This leaves the state with $1.3 billion – the largest state revenue surplus ever recorded.

Once $793 million worth of items included in the surplus section of the new fiscal year 2023 budget that began Friday are funded, that leaves the state $515.2 million that returns to the general revenue fund either to accrue interest in the short term or be appropriated.

The state has enjoyed organic budget surpluses since fiscal year 2018, not counting fiscal year 2020 – when the COVID-19 pandemic hit towards the second half of the fiscal year. The personal income tax filing deadline was moved from April 2020 and July 2020, creating a shortfall of approximately $200 million. The budget ended balanced in part thanks to COVID-19 relief dollars freeing up other state funds.

By pure dollars, fiscal year 2022 tax revenue was driven by the personal income tax and consumer sales and use tax. The personal income tax brought in $2.5 billion, 22.6 percent more than the $2.2 million estimate for a $461.5 million surplus. June personal income tax revenue of $232.1 million was 15.5 percent more than the $201 million estimate for $31.1 million in surplus.

The consumer sales and use tax brought in $1.7 billion, 12.3 percent more than the $1.5 billion estimate for $181.7 million in surplus. June sales tax revenue of $192.8 million was 19.2 percent more than the $161.8 million estimate for $31 million in surplus.

By percentages, both the severance tax on coal and natural gas and the corporate net income tax were winners. Severance tax revenue for the last fiscal year of $730.9 million was 121.5 percent more than the $330 million revenue estimate for $400.9 million in surplus. June collections of $120.9 million were 200.6 percent more than the $40.2 million estimate. Severance tax revenue is being driven by higher energy prices and overseas demand for coal and liquid natural gas.

Corporate net income tax revenue for the fiscal year of $366.4 million was 128.6 percent more than the $160.3 million estimate for a $206.1 million surplus. June revenues of $71.8 million were 187.1 percent more than the $25 million estimate for $46.8 million in surplus.

(Adams can be contacted at sadams@newsandsentinel.com)

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