Falling: State revenue off $169 million in January

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Falling: State revenue off $169 million in January

West Virginia witnessed a 53 percent drop in severance tax revenue in January when compared to the same period in 2015.

Additionally, a lack of growth in personal income tax and sales tax in January led to cumulative collections of $2.29 billion, nearly $169.5 million below estimate, according to tax figures released Wednesday.

The massive loss did not surprise Revenue Cabinet Secretary Robert S. Kiss, who said the state is witnessing consistent declines in severance tax.

“Low energy prices are continuing to plague the energy sector,” Kiss said. “Coal, oil and gas industries are all affected.”

In January, severance tax collections totaled more than $11.7 million, an amount that was more than $16.5 million below estimate, Kiss said.

Cumulative general revenue fund severance tax collections of $120.3 million were $111 million below estimate and 44 percent below prior year receipts, state figures show.

Collections of personal income tax were 6.7 percent above prior year receipts in January due to timing issues, said Deputy Secretary Mark Muchow.

Collections were nearly 2 percent below prior year receipts despite a wage and salary withholding tax gain of 3 percent for the month, he said.

He continued, reporting quarterly estimated income tax payments were down 7.4 percent in January and 6.5 percent for the combined months of December and January. Year-to-date estimated income tax payments were 4 percent lower than prior year receipts. Cumulative income collections were more than $24 million below estimate and just 1 percent ahead of prior year receipts.

Collections of consumer sales tax were nearly 2.5 percent below prior year receipts, but still more than $400,000 above estimate, state figures showed.

The monthly revenue decrease was partially attributable to an increase in the quarterly local sales tax revenue distribution from less than $4.1 million last year to more than $10.5 million this year, according to state officials.

Tobacco Product Excise Tax collections were $7 million in January, $1.2 million below estimate. Cumulative collections of nearly $59million were $1.3 million below estimate and more than 5 percent below prior year receipts.

Kiss said his office is still projecting a more than $350 million budget shortfall for the upcoming fiscal year.

While much higher estimates are swirling around, upwards of $500 million, Kiss said his office’s figure is just a projection, but given the most recent data, he isn’t changing the figure.

“We made the base numbers on the information we have,” he said. “We are not projecting numbers in that ($500 million) range.”