April Brought Slight Budget Surplus for West Virginia
CHARLESTON — With two months left in fiscal year 2021, West Virginia’s tax collections for April came in above estimates but below where state officials wanted collections to be.
“Revenue wasn’t quite as high as we thought … but we’ll take any number that’s in the black and everything,” said Gov. Jim Justice said during his Monday COVID-19 briefing.
According to a monthly report from the Senate Finance Committee, West Virginia collected $539.8 million in taxes for the month of April — just 0.4% above the $537.9 million revenue estimate from the Department of Revenue for the month. It’s also 39% more than revenue collections for April 2020.
Year-to-date tax collections for fiscal year 2021 ending on June 30 were more than $4 billion, which was $237.3 million — or 6.3% — above the $3.8 billion revenue estimate. Tax collections also exceeded collections for the first 10 months of the previous fiscal year by 8.4%.
“If you just think about it, a $237 million surplus now in West Virginia is just wonderful, wonderful news,” Justice said. “Congratulations to all those who put in the licks to make that happen every day in West Virginia, especially our businesses and folks all across this great state.”
April tax collections were driven by the consumer sales and use tax, the corporate net income tax, and even the severance tax on coal and natural gas – long a volatile and undependable source of tax revenue.
April’s consumer sales tax revenue was $126.1 million, which was 21.5% more than the $103.8 million revenue estimate. Year-to-date collections of $1.2 billion were 5.3% more than the $1.1 billion revenue estimate. Corporate net income tax revenue for the month was $63.3 million, which was 181.5% more than the $22.5 million estimate. Year-to-date collections of $242.8 million were 99.9% more than the $121.5 million estimate.
April severance tax collections came in above estimate for the second month in a row. Collections for the month were $29 million, which was 95% more than the $14.9 million estimate. Year-to-date collections between July 2020 and April were $187.6 million, which was 7.5% above the $175.1 million revenue estimate.
Personal income tax collections for April nearly pulled West Virginia tax revenue below estimates. The state collected $241 million in personal income tax in April, which was 25.2% below the $322.2 million estimate. This decrease is likely due to Justice moving the state income tax filing deadline from April 15 to May 17 following a similar move by the federal government.
Year-to-date personal income tax collections remain above estimate, coming in at $1.82 billion compared to the $1.81 million estimate – a difference of 0.4%. The personal income tax became the focus of much of the 2021 legislative session as Justice, the state Senate, and the House of Delegates debated ways to phase out the tax which typically accounts for as much as 43 percent of the state’s general revenue budget.
Officials expect the state to end the fiscal year with between $300 million and $350 million in surplus tax collections.