By ANDREA LANNOM
CHARLESTON, W.Va. — Budget officials have not changed their estimate for the current fiscal year’s gap, saying that number has stayed at $123 million.
And to resolve that gap, Gov. Jim Justice along with House and Senate leadership have proposed sweeping one-time special revenue accounts and re-appropriated funds.
This is a move that Department of Revenue Secretary Dave Hardy says will keep the Rainy Day Fund above the 15 percent benchmark that would prevent another bond rating downgrade.
Collections for last month were at $251.8 million, which was $10.3 million above estimate and represented a slight decline from last February’s numbers.
Cumulative collections of $2.516 billion were $105.9 million below estimate and 1.3 percent above last year’s receipts.
Hardy said February is typically the lowest month for projected collections. The reason, he said, is twofold.
“One is obvious — the length of the month. Also, it’s the beginning of income tax refunds,” Hardy said.
Hardy said the fiscal year is two-thirds over but the projected shortfall has remained at $123 million. Last week, Justice said he wants to sweep one-time funds from various state agencies — $60 million from special revenue accounts and $60 million in re-appropriated funds — to avoid tapping into the Rainy Day Fund.
“It’s an aggressive plan. It makes a point that if we sweep the accounts clean, almost down to zero, then we avoid going to the Rainy Day Fund one time — this time, between now and June 30. Going forward, we have to put structural fixes in place,” Hardy said.
Hardy said the current balance of the Rainy Day Fund is $693.4 million. Bond rating agencies have said the Rainy Day Fund should be no less than 15 percent of the General Revenue Fund budget.
“We are trying very hard to make it to June 30 by not using the Rainy Day Fund to fill this gap and not going below the 15 percent number and that’s important to the bond rating agencies,” Hardy said.
That 15 percent benchmark would be a Rainy Day Fund balance of $641 million.
“If we go below that $641 million, then we are going below the minimum benchmark for the Rainy Day Fund balance for bond agencies,” Hardy explained.
Muchow went over numbers for severance tax, personal income tax, consumer sales tax, tobacco tax, B&O tax and state road fund collections.
• For personal income tax, collections fell by 13.7 percent from last year and the decrease was attributed to a $5 million transfer to the Other Post Employment Benefit Trust Fund and an $8.8 million increase in tax refund payments compared to last February.
Cumulative personal income tax collections were $1.118 billion, representing $45.6 million below estimate and 0.3 percent below last year.
• Consumer sales tax collections were 1.1 percent of last year and exceeded estimates by about $3.5 million.
• Severance tax, collections were $28.8 million, which was $2.3 million above estimate and 14.4 percent higher than last year’s numbers.
• For tobacco tax, collections were $12.9 million, which were $3.3 million below estimate and cumulative collections were $500,000 below estimate.
• B&O tax collections were $11.5 million, $1 million above estimate and 7.9 percent below last year’s numbers. Muchow said the reason this is lower is because of the closure of a number of coal-fired power plants.
• For the state road fund, collections were $45.9 million, which were $4.4 million below estimate and 17.6 percent below last year’s numbers.
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