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Kiss to recommend spending cuts to Tomblin; revenues down $80 million

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Kiss to recommend spending cuts to Tomblin; revenues down $80 million
By Jeff Jenkins, WV MetroNews

State Revenue Secretary Bob Kiss said Tuesday his office will be making recommendations to Gov. Earl Ray Tomblin in the next few weeks on how to cut the current state budget after the latest revenue collections missed estimates.

September tax collections fell short by $32.2 million putting the state behind $81.2 million after the first three months of the new fiscal year, Kiss said.

“I can’t draw you a scenario by which I think we will meet the revenue estimates for the current year so we need to start taking some action,” Kiss told reporters during a conference call.

Kiss hopes to come up with those recommendations in the next four to six weeks. He could recommend across-the-board cuts, targeted cuts, one-time monies or redirection of monies. Last year at this time Tomblin ordered a four percent across-the-board cut in spending and one percent for public education.

There are indications that the state’s economy is beginning to recover, severance and sales tax estimates were met for the first time in months in September, but personal income and corporate income taxes remain off the mark.

“The rate of growth or recovery is simply not going to great enough to offset that $80 million so we need to start taking action now. You can’t wait until half the fiscal year has passed or eight months has passed. It’s too late to deal with it then,” Kiss said.

The state Department of Revenue released the following information about September collections Tuesday:

Detailed collections of interest in September include:

· Severance Tax collections totaled $26.2 million for the month, an amount that was nearly $0.2 million above estimate and 7.6 percent above prior year receipts. Cumulative General Revenue Fund Severance tax collections of slightly more than $38.3 million were still $14.4 million below estimate and 2 percent below prior year receipts. Lower-than-anticipated natural gas prices were the major contributing factor to the recent deficit.

· Personal Income Tax collections were 6.1 percent below prior year receipts due to a 30 percent ($3.2 million) decline in monthly nonresident withholding tax receipts and a decline of more than 14 percent in estimated tax and return payment tax receipts ($9.3 million). Withholding tax collections rose by a slower-than-expected 0.7 percent during the month due to lower-than-anticipated employment increase. Collections fell $30.5 million below the $204.2 million estimate for the month. Cumulative collections were $44.2 million below the $469.3 million estimate and 3.6 percent below prior year receipts.

In addition, year-to-date tax refunds were up by nearly 12 percent from last year to nearly $15 million.

· Corporation Net Income Tax collections totaled less than $23.6 million and cumulative collections totaled $28 million. September collections were $5.4 million below estimate and 34 percent below prior year receipts. Cumulative receipts were $10 million below estimate and more than 40 percent below prior year receipts.

· Consumer Sales Tax collections were 8.5 percent above prior year receipts and nearly $3.8 million above estimate following two consecutive months of decline. After discounting temporary gains from additional local sales tax collections, net collections were up by roughly 6.2 percent from prior year receipts. The cumulative deficit in General Revenue Fund sales tax collections fell to $22.3 million with most of the shortfall attributable to July collections.

· B&O Tax collections of less than $8.9 million were $0.7 million below estimate and 7.7 percent below prior year receipts. Year-to-date collections of $28.2 million were more than $0.2 million above estimate and 3.7 percent below prior year receipts.

· Tobacco Product Excise Tax collections totaled nearly $19.4 million. Monthly collections were more than $0.3 million above estimate. Cumulative collections of $57.3 million were $8.2 million above estimate and more than double prior year receipts.

· State Road Fund collections of more than $61.3 million were nearly $4.8 million above estimate, but 4.6 percent below prior year receipts. Cumulative State Road Fund collections of more than $186.9 million were $10.7 million above estimate and 0.6 percent below prior year receipts.