CHARLESTON — Tax collections for West Virginia’s general revenue fund in September came in above estimates for the month, reversing a slight decline and adding to a small but growing surplus.

According to reports released Wednesday by the state Department of Revenue and the Senate Finance Committee, September tax collections for fiscal year 2026 were $585.7 million, which was more than 8 percent above the $542 million estimate set by the state Department of Revenue, providing the state a $43.7 million surplus for the month. September revenues were also 3.2 percent above the $567.7 million in collections in September of last fiscal year.

Year-to-date tax collections for the first three months of the current fiscal year were more than $1.370 billion, or 4.7 percent above the $1.310 billion revenue estimate, taking the total general revenue surplus to nearly $61 million.

“I’m encouraged by the state’s financial performance over the first quarter of this year,” said Gov. Patrick Morrisey in a statement Wednesday afternoon. “We are beginning to see the results of difficult decisions I made earlier in the year – partnering with the Legislature to enact a fiscally conservative budget and driving program efficiencies across my administration.”

The Legislature passed — and Morrisey signed — a $5.323 billion general revenue budget for fiscal year 2026, which began on July 1. That balanced budget came following projections by Morrisey’s revenue officials in January that the state would see a nearly $400 million gap in fiscal year 2026 spending versus revenues in an early six-year budget forecast.

With the $61 million in surplus collections, that state is sitting on more than $200 million in unappropriated money in the general revenue fund, as well as $1.374 billion in the state’s two revenue shortfall reserve funds (called the Rainy Day Fund) and $460 million set aside in the personal income tax reserve fund. Work has already begun on crafting the fiscal year 2027 general revenue budget, which Morrisey will present to lawmakers in January during the regular 60-day legislative session.

“While the State still faces some long-term budget challenges and other fiscal uncertainties, I am optimistic that our hard work will result in West Virginia being on a solid financial trajectory moving forward and allow us to return more money back to our people,” Morrisey said.

Collections for the state’s four largest drivers of tax revenue – the personal income tax; the severance tax on coal, oil and natural gas; the consumer sales and use tax; and the corporate net income tax – were all above estimates. Personal income tax collections and severance tax collections led the way in collections for September.

Personal income tax collections for September were $247.6 million, 6.8 percent more than the $231.8 million revenue estimate, providing a $15.8 million surplus. September income tax collections were also 3.5 percent better than September 2024 collections of $239.3 million.

Fiscal year-to-date personal income tax collections of $539.1 million were 5.9 percent above the $509.2 revenue estimate for a $29.9 million surplus. That’s with the 2 percent and 4 percent income tax rate cuts that went into effect at the beginning of January 2025, on top of the 21.25 percent income tax cut that went into effect in calendar year 2023.

“Our fiscally responsible approach of managing our state’s expenses while working to return more money every year to the taxpayers is working” said Senate Finance Committee Chairman Jason Barrett, R-Berkeley. “In 2023, we cut the state’s personal income tax rate by 21.25 percent, and because of strong financial conditions we’ve met since then, we’ve cut it by another 6 percent.”

September severance tax collections of $51.7 million were 46 percent more than the $35.4 million revenue estimate for a $16.3 million surplus for the month. However, fiscal year-to-date severance tax collections of $82.2 million were nearly 9 percent below the $90.3 million revenue estimate for July, August, and September combined.

The consumer sales and use tax brought in $173 million in September, or 4.4 percent above the $165.8 million revenue estimate for a nearly $8 million surplus for the month. Fiscal year-to-date sales tax collections of $489.6 million was 3.6 percent above the $472.5 million estimate, adding $17.1 million to the fiscal year-to-date surplus.

Corporate net income tax collections in September came in just in the black, bringing in $60.2 million for the month, or nearly 0.6 percent above the $59.9 million estimate. Fiscal year-to-date corporate net income tax collections of $82.1 million were 10.7 percent above the $74.2 million estimate, adding $nearly $8 million to the surplus.

Barrett said that while these general revenue collections numbers are a positive indicator of the current state of West Virginia’s economy, he said more work is needed to bring in new workers and taxpayers.

“I’m optimistic about our direction based on these numbers, but I think now is the time to work even harder,” Barrett said. “We need to ramp up our economic development efforts and focus on ways to continue to improve West Virginia’s business climate. Attracting new, high-paying jobs to our state is a critical part of growing these revenue numbers.”