Strong April tax collections should mean balanced budget for WV
By Phil Kabler, The Charleston Gazette
Strong tax collections in April should put the state in line to finish the 2014-15 budget year with a balanced budget, Revenue Secretary Bob Kiss said Tuesday.
“I think we’re on target to come in with a balanced budget without having to do anything drastic,” Kiss said during a monthly media conference on state revenue figures.
With two months remaining in the 2014-15 budget year, which ends June 30, overall state revenue collections total $3.48 billion, about $23.77 million below estimates, but $61 million ahead of the same point last year.
“As long as things don’t go drastically south on us in May or June, we’re fairly comfortable,” Kiss said of ending the year without a budget deficit.
Overall revenue collections for April of $564.8 million came in at $24.27 million, or nearly 5 percent, above projections.
“April was not a bad month,” Kiss said, adding, “It is a significant revenue month in terms of the big picture.”
April’s total revenue was down about $12 million compared to April 2014 figures, but Deputy Revenue Secretary Mark Muchow noted that last April’s revenue figures included $70 million of supplemental appropriations transferred to close funding gaps in the 2013-14 budget.
“Compared to last year, we’re up by 10 percent, which is very healthy,” he said.
April, of course, is a key month for personal income tax collections, and revenues of $338.19 million exceeded projections by $25.59 million.
Payroll withholding taxes were up 1 percent, and estimated income tax payments jumped 15 percent, Muchow said, adding, “In my mind, that’s the biggest positive we have with the income tax payments.”
Consumer sales taxes of $101.58 million missed estimates by about $920,000, but outpaced April 2014 collections by nearly $11 million. Sales taxes are remitted to the state a month after they are collected, and retail sales in early March were affected by severe winter weather in much of the state.
Privilege taxes – or the 5 percent sales tax collected on motor vehicle sales – brought in $19.47 million in April, exceeding projections by $3.49 million.
“It’s growing faster than the general consumer sales tax. That’s good news,” Muchow said.
He said that reflects pent-up demand after many people put off car buying during the recession of 2008 and the economic downturn that followed.
While most categories of revenue collections came in at or above estimates for the month, state severance tax collections continued to slide in April, coming in $8.27 million below projections for the month, at $32.13 million.
Muchow said that was caused primarily by falling energy prices. He noted that coal production for the month was down 1.4 percent compared to April 2014, but severance tax collections for coal dropped 7.5 percent.
He said the downturn in coal and natural gas prices is likely to continue into next year.