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CHARLESTON -- West Virginia's tax revenue numbers for October were full of more tricks than treats due to severance tax revenue tanking. But Gov. Jim Justice said the state is still in the black.
According to the monthly general revenue fund report released Wednesday by the Senate Finance Committee, October tax collections were $390.8 million, which was barely 2% more than the $383.4 million estimate for the month set by the state Department of Revenue, providing a $7.4 million tax revenue surplus for the month.
October tax collections brought the total tax collections year-to-date for fiscal year 2024 beginning in July to $1.8 billion, which was 15.5% more than the $1.6 billion revenue estimate set for the first four months of the fiscal year, providing a year-to-date surplus of $242.2 million.
However, collections for July, August, September and October of the current fiscal year were 10% lower than the first four months of the previous fiscal year, which came in at more than $2 billion.
Contributing to the lower-than-expected tax revenues in October was a decrease in consumer sales and use tax collections and a massive decrease in severance tax collections derived from coal and natural gas production.
October sales tax collections of $125.2 million were a quarter of a percent lower than the $125.5 million revenue estimate, resulting in a deficit of $312,000 for the month.
Fiscal year-to-date sales tax collections of $539.7 million were 2.3% more than the revenue estimate for a $11.9 million surplus for the first third of the fiscal year.
According to estimates, the state was expected to collect $3 million in severance tax revenue for coal, oil and natural gas production. Instead, reports show a deficit of -$37.5 million – a difference of $40.5 million. According to an afternoon press release from the Governor’s Office, the state actually collected $55.7 million in severance tax collections, but there was a record return of local oil and gas severance receipts of $74.5 million, resulting in the -$37.5 million deficit.
Year-to-date severance tax collections are 60.5% below revenue estimates for the fiscal year of $88.5 million. So far, the state has only collected nearly $35 million, a difference of $53.5 million.
When asked about the severance tax collections during his weekly administration briefing from the Capitol Wednesday, Justice admitted that the collections were low, but overall general revenue fund collections were still positive.
"Our severance tax dollars are down ... but at the end of the day, our state is still percolating and doing dadgum good. That's the good news," Justice said.
"We minded the store the right way. We didn't run out and spend all of our money and do a bunch of frivolous projects. We absolutely didn't build in case that took us right off the rails. We did it right."
Both the state's personal income tax and corporate net income tax came in above revenue estimates in October, even with reductions in personal income tax rates in effect. October personal income tax collections of $189.3 million was 5.4% more than the $179.5 million revenue estimate, providing the state with $9.8 million for the month.
Year-to-date personal income tax collections of $796.8 million were approximately 18% more than the $675.6 million estimate for a $121.2 million surplus.
October corporate net income tax collections of $26.3 million provided the state with $15.7 million in surplus revenue for the month. Year-to-date corporate net income tax collections of $152.3 million were 130.4% more than the $66.1 million revenue estimate.