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CHARLESTON - As Gov. Jim Justice prepares to present his final budget request to lawmakers next week, West Virginia wrapped up the first six months of the current fiscal year with positive tax collection numbers.
According to the monthly tax collection report released Tuesday morning by state Senate Finance Committee Chairman Eric Tarr, R-Putnam, West Virginia ended the first six months of fiscal year 2024 as of the end of December with more than $406 million in surplus tax revenue.
Halfway through the current fiscal year, the state collected $2.7 billion in tax collections fiscal year-to-date, which was 17.2% more than the $2.4 billion estimate from the state Department of Revenue. Fiscal year-to-date tax collections were 9.4% below the first six months of fiscal year 2023 last year, when collections at that same point were $3.1 billion. The state ended that fiscal year with more than $1.8 billion in surplus revenue.
Tax collections for the month of December were $553.2 million, which was 27.7% more than the $433.1 million revenue estimate, providing the state a $120.2 million surplus for the month. December tax collections were also pretty close to collections for December 2022, pulling in $701,000 more than last December.
West Virginia's tax collections for December were buoyed by stronger-than-predicted collections for personal income taxes, corporate net income taxes, and the severance tax on coal, oil, and natural gas.
Personal income tax collections for December were $236.8 million, which was 42.6% more than the $166.1 million revenue estimate, providing a $70.7 million surplus for the month. Fiscal year-to-date personal income tax collections of $1.2 billion was 20.7% more than the $973.1 million revenue estimate. The fiscal year-to-date personal income tax revenue surplus was $201.2 million, making up half of the state's total tax revenue surplus for the first half of fiscal year 2024.
Corporate net income tax collections of $56.5 million were 41% more than the $40.1 million revenue estimate for the month, providing a $16.4 million surplus for the month. Fiscal year-to-date corporate net income tax collections of $218.3 million was nearly 100% more than the $109.2 million revenue estimate, adding $109.1 million to the state's six-month $406 million surplus.
While severance tax revenue was up in December, fiscal year-to-date collections remain below estimates and far below collections for the first six months of the previous fiscal year. December severance tax collections was $35.8 million, which was 47.4% more than the $24.3 million revenue estimate, adding $11.5 million to the state's December surplus total. But fiscal year-to-date severance tax collections were only $112.1 million, or 22.8% below the $145.2 million estimate.
Consumer sales and use tax revenue for December and fiscal year-to-date also remain subdued but in the positive. Sales tax revenue for December was $168.4 million, which was 2.2% more than the $164.7 million revenue estimate, proving a $3.7 million surplus. Fiscal year-to-date sales tax numbers of $870.1 million was 2.5% more than the $849.1 million revenue estimate, providing a $21 million year-to-date surplus.
Justice and Department of Revenue officials are working on revenue estimates for fiscal year 2025 beginning on July 1, as well as the budget bill for fiscal year 2025. That budget will be formally presented to the West Virginia Legislature on Jan. 10 when Justice presents his final State of the State address as he wraps up his second and last term as governor.
Justice has said he plans to present another flat budget similar to the $4.875 billion general revenue budget for the current fiscal year passed by lawmakers during the 2023 legislative session. Justice also already said he plans to offer a 5% pay raise for state employees, teachers, school service personnel, and state troopers for the fifth year in a row. The raise is in response to premium increases - including a 10.5% premium increase – for state workers participating in the Public Employees Insurance Agency.