With fiscal year half over state revenue collections fall short by nearly $100 million
By Jeff Jenkins, WV MetroNews
State revenue collections halfway through the fiscal year are approaching $100 million below estimates, state Revenue Secretary Bob Kiss said Tuesday.
December collections missed the mark by $6.7 million leaving the state $98.2 million below estimates during the past six months. Other months have been worse, Kiss said during an appearance on MetroNews “Talkline.”
“In the scheme of what we’ve seen the last several months and years–it was not a horrible month. Obviously, you never want to not hit your revenue estimate but we didn’t miss it by a magnitude larger,” Kiss said.
Collections for Personal Income Tax and Corporate Income Tax were off the most in December. The state brought in $3.9 million more in severance taxes than expected but that’s still $14 million below what the state collected in taxes from coal, oil and natural gas in December 2014.
Gov. Earl Ray Tomblin will submit a balanced budget to state lawmakers Wednesday afternoon just before he delivers his final address to members of the House of Delegates and state Senate. Tomblin has already taken steps in recent months to deal with this year’s revenue shortfall, Kiss said.
“Including budget cuts, including revenue redirections and including a couple of other pieces of the puzzle which he will present when he presents his budget,” Kiss said. “We still believe that the fix that he put into place a couple months ago will work but that assumes the legislature adopts the additional pieces.”
Tomblin leaves office next Monday when Governor-elect Jim Justice is sworn-in. Kiss said in past transitions the incoming governor’s administration would at least use a skeleton of the outgoing governor’s new budget. He said Justice will only have until Feb. 8 to get a proposed budget ready for the legislature.
“We have a lot of work behind it (Tomblin’s last budget),” Kiss said. “I don’t how in a period of 30 days you could substantially rewrite it. But again, having said that, if you’re going to have a fundamental different approach from Governor Tomblin’s recommendations there’s going to have to be some substantial changes, maybe more than would be the norm in prior administration changes.”
According to the Department of Revenue, major tax collections of interest for December include:
- Personal Income Tax: Collections rose by 2.2 percent from the prior year to $146.6 million in General Revenue Fund collections. The increase in collections was attributable to both a $5.6 million decrease in transfers to special revenue accounts and the use of $5 million from the Income Tax Refund Reserve Account to pay tax refunds. Total collections actually fell short of estimate by more than 4.8 percent during the month.
Cumulative Personal Income Tax collections of $836.4 million were $51.9 million below estimate and less than 0.1 percent below prior year receipts. Absent enhancement associated with changes in special revenue fund transfers, total year-to-date Personal Income Tax receipts were 2.5 percent below prior year receipts.
- Consumer Sales Tax: Collections rose 5.1 percent above prior year receipts and exceeded the monthly estimate by $1.2 million. After discounting gains from higher municipal sales tax collections and special revenue transfers, State sales tax revenue growth was 3.4 percent for the month. Cumulative adjusted collections were down from prior year receipts by 0.6 percent with most of the decline occurring in July (June sales). The cumulative deficit in General Revenue Fund sales tax collections decreased to $35.0 million with more than 63 percent of the shortfall attributable to July collections.
- Severance Tax: Collections totaled nearly $20 million for the month, an amount that was nearly $3.9 million above estimate but nearly 42 percent below prior year receipts. Cumulative General Revenue Fund Severance tax collections of nearly $94.5 million were still $9.6 million below estimate following a slow start at the beginning of the fiscal year. Collections were also down 13 percent from prior year-to-date receipts.
- Corporation Net Income Tax: Collections totaled more than $21.3 million and cumulative collections totaled nearly $53.8 million. December collections were $2.7 million below estimate due to a 27percent decrease in gross monthly payments in comparison with the prior year. Cumulative receipts were $18 million below estimate and 36 percent below prior year receipts.
- Tobacco Product Excise Tax: Collections totaled $16.1 million in December. Monthly collections were nearly $0.1 million above estimate. Cumulative collections of nearly $104.5 million were $5.6 million above estimate and double prior year receipts. Collection patterns are beginning to settle as consumers and industry adjust to the recent tax changes.
- State Road Fund: Collections of $39.0 million were $6.8 million below estimate and 41.7 percent below prior year receipts. Cumulative State Road Fund collections of more than $338.5 million were nearly $9.5 million above estimate, but 5.9% below prior year receipts.