CHARLESTON, WV – Gov. Jim Justice reported today that January 2020 revenue collections were $13 million above estimates, which was 3.6% above prior year receipts.
The month of January also marks the beginning of the third quarter of Fiscal Year 2020. Cumulatively, FY 2020 is just 0.6% below the record-breaking prior year receipts.
“Our numbers continue to show that West Virginia is in good financial health, pacing very close to last-year’s record-breaking numbers,” Gov. Justice said. “That said, we must continue to be conservative in our budgeting, so I encourage the Legislature to continue monitoring these numbers just like Secretary Hardy and I will.”
“This marks the second month in a row that our shortfall has decreased,” Revenue Secretary Dave Hardy said. “We’re seeing positive momentum in a lot of areas – like our corporate net income tax being more than 60 percent above last year’s receipts – and this momentum is occurring despite the loss of thousands of jobs due to the halting of pipeline construction, and our year-to-date severance tax collections coming in 34 percent below last year. These numbers show, more than anything, that West Virginia’s economy is diversified and set up for future success.”
The following is a summary of January General Revenue collections:
January General Revenue Fund collections of $437.5 million were nearly $13.0 million above estimate and 3.6% above prior year receipts. The monthly surplus was due to stronger than expected collections for the Corporation Net Income Tax, Miscellaneous Receipts, Interest Income and Consumer Sales Tax. Receipts from these four sources were collectively $30 million above estimate for the month.
Year-to-date collections of more than $2.641 billion were $20.4 million below estimate and 0.6% below prior year receipts. The cumulative shortfall was due to a significant slump in energy prices, particularly for natural gas and slower than anticipated growth in income withholding tax revenues partially due to a work stoppage involving interstate gas pipeline projects. Coal sales have also recently slowed due to both a global economic slowdown with lower steel demand and stiffer domestic competition from natural gas in the electric power generation market.
A summary by major component follows:
Personal income tax collections of more than $222.2 million were more than $1.9 million below estimate in December, but 2.8% ahead of prior year receipts. Cumulative personal income tax collections of nearly $1.196 billion were $35.6 million below estimate and 1.4% ahead of prior year receipts. Year-to-date income withholding tax collections were 0.2% below prior year receipts due to weaker employment activity within the energy sector and the loss of an estimated 4,000 jobs in natural gas pipeline construction. Current legal hurdles are weighing down overall wages and tax revenue growth at this time.
Consumer sales tax collections of $128.4 million were more than $1.2 million above estimate in January and 3.0% ahead of prior year receipts. Cumulative collections of $811.5 million were $1.6 million below estimate and 1.8% above prior year receipts. Collection growth has slowly accelerated in recent months after a slow start earlier this fiscal year.
January severance tax collections totaled nearly $20.4 million. Monthly collections were more than $0.8 million below estimate and 33.2% below prior year receipts. Year-to-date general fund severance tax collections of more than $156.4 million were $38.6 million below estimate and 34.7% below prior year receipts. Year-to-date local tax distributions paid out of general revenues were actually up by 7.0% from the prior year due to higher energy prices, and growth in coal, oil and natural gas sales in prior periods. However, the quarterly coal severance tax distribution totals for January were down 9.3% from last year.
B&O tax collections totaled $9.2 million in January and $76.7 million for the year-to-date. Monthly collections were up 7.9% from the prior year. Cumulative collections were nearly $13.0 million above estimate.
Corporation net income tax collections totaled $11.0 million in January and nearly $108.6 million for the year-to-date. Monthly collections were $9.5 million above estimate and 60.2% above prior year receipts. Cumulative collections were $32.8 million above estimate and 4.0% above prior year receipts.
January tobacco products tax collections of $13.1 million were $0.4 million below estimate and 3.1% below prior year receipts. Cumulative collections of nearly $98.7 million were $7.8 million below estimate and 3.9% below prior year receipts. The relatively large recent decline in collections is partially due to some shift in consumer tastes away from traditional products toward e-cigarette products.
Miscellaneous Receipt collections totaled more than $10.2 million in January and $15.6 million for the year-to-date. Cumulative collections were more than $9.4 million above estimate more than triple prior year cumulative receipts.
Interest income receipts totaled more than $12.0 million in January and more than $27.1 million for the year-to-date. Cumulative receipts were nearly $7.7 million above estimate and more than 150% ahead of last year.