By Jeff Jenkins
CHARLESTON, W.Va. — The positive news that surfaced following November tax collections in West Virginia took an about-face Monday when the revenue figures for December were released. State Revenue Secretary Bob Kiss said collections missed estimates by $27 million.
Kiss said that probably means the state government hiring freeze will remain in effect for the rest of the fiscal year.
“Our hope was that (the freeze) may not have to be in place for the whole year but at this point clearly the hiring freeze will have to be in place this year,” Kiss said.
The drag is coming in severance tax collections missing estimates by $18 million last month. State Deputy Revenue Secretary Mark Muchow told reporters during a conference call prices for coal and natural gas are down significantly taking down the tax collection numbers. Muchow said a few cold weather weeks in January would help things.
Some in the new Republican leadership in the state legislature have suggested tax cuts during the upcoming legislative session. Secretary Kiss said he has a hard time seeing that without major spending cuts.
“I’m not sure without making significant additional reductions in the budget how you are going to be able to present additional tax cuts, certainly not in the short term,” Kiss said.
The legislature is already staring out a budget hole that is expected to top $200 million for next fiscal year. Kiss said recent tax cuts have contributed to the current “revenue challenges.”
“One of the reasons is the state has undergone a several year cycle of significant tax reductions,” he said.
Personal income tax collections were down $21 million in December but consumer sales tax collections were up $3.5 million. January numbers should reflect holiday shopping sales tax collections.