CHARLESTON — West Virginia saw its largest single month in tax collections over and above estimates, providing the state with more than $237 million in surplus revenue with two months left in fiscal year 2025.

But much of that surplus is already spoken for.

According to reports last week from the state Department of Revenue and the Senate Finance Committee, April collections for the general revenue fund of $643.8 million were 26.8% above the $507.8 million estimate set by revenue officials.

Year-to-date general revenue tax collections for fiscal year 2025, which ends June 30, were $4.6 billion, 5.4% more than the $4.4 billion estimate, providing the state with a $237 million surplus.

“Today’s revenue projections are good news for West Virginia, as the additional expected revenue will help us address future fiscal challenges,” Gov. Patrick Morrisey said in a statement last week. “With our known challenges with PEIA (Public Employees Insurance Agency) and potential changes in federal spending and tax policies, we need to be conservative in our own state budget planning and maintain a healthy reserve.”

The Department of Revenue called the increase in tax collections an “April surprise,” attributing the revenue growth to higher-than-expected personal income tax payments due by April 15. April personal income tax collections of $284.7 million were 44.8% more than the $196.7 million estimate. Fiscal year-to-date personal income tax collections of $1.8 billion were 5.8% more than the $1.7 billion estimate, adding $99.1 million to fiscal year-to-date surplus collections.

With two months remaining in the fiscal year and further increases in excess revenue possible, much of the $237 million in available surplus tax collections are already spoken for.

During the legislative session that ended April 12, the governor’s office recommended several supplemental appropriations using one-time monies through available surplus collections in the fiscal year 2025 general revenue fund. Lawmakers approved more than $126.2 million in supplemental appropriations, leaving approximately $110.8 million in unappropriated surplus.

The largest of these expenditures included $39.4 million for the Department of Human Services Medical Services line item, which is the state’s Medicaid program, and $28.4 million for the Hope Scholarship educational voucher program to help fully fund the program for fiscal year 2026 beginning July 1.

Another $100 million will go to the Division of Highways for road maintenance and paving projects from available surplus at the end of fiscal year 2025 once the general revenue budget for fiscal year 2026 goes into effect July 1.

The Legislature passed a bill at the end of the session that set the fiscal year 2026 general revenue budget at $5.318 billion. Morrisey signed the budget on April 17 after issuing 29 line-item vetoes that reduced the budget to $5.28 billion.

Items vetoed included $75 million to the Division of Economic Development project fund, $10 million to the Water Development Authority and $250,000 to the Cabell County Commission for Lily’s Place. Morrisey also reduced the amount going to the Division of Highways from $125 million.

In his veto letter, Morrisey alluded to additional challenges that could face the state budget in fiscal year 2026.

“A cautious and prudent approach must be taken to avoid spending the state’s surplus balances due to anticipated out-year budget gaps and to address likely fiscal challenges involving Medicaid, PEIA and potential changes to the federal tax code,” Morrisey wrote.