BECKLEY, W.Va. — Secretary of Revenue Bob Kiss said Monday he’s not ready yet to hit the panic button, but with state revenues lagging behind expectations and anticipated layoffs in the coalfields, he’s monitoring an income situation he’d hoped would be on the cusp of improvement.
“We’re not seeing the turnaround we were hoping to see sooner rather than later,” Kiss said. “We continue to see the downward trend.”
Actual revenue collections were down $17.4 million overall for July. Year-end figures were not available because of the state’s transition to a new computer system.
Kiss described the state’s financial situation as “in a flux period.”
While revenues from natural gas and oil drilling continue to be strong, he said coal is in “significant decline.”
“The amount of revenue (from) gas needs to be higher than the loss we see in coal,” he said. “The trend is hopeful, but we still have quite a ways to go before we offset the loss in coal.”
Losses from the coalfields affect the state budget in more ways than one.
Lagging coal production means less money in the coal severance tax budget line item and, thus, less money being distributed to county and municipal governments. Severance tax revenue was $10.4 million below estimates in July, Deputy Secretary Mark Muchow said.
The first $23 million in severance taxes goes to the infrastructure and bond fund each year, this year leaving $11.1 million to be transferred to other government entities and $12 million for the Road Fund.
Muchow said that although natural gas and oil production hadn’t yet made up for the loss from coal, the state does have twice as much carryover in severance taxes as it did last year.
“Last year the carryover was $8.5 million,” Muchow said. “This year it’s $17.8 million.”
Still, Muchow said, hopes are pinned on natural gas to continue to show growth in the northern and north-central part of the state.
“We need a good performance from natural gas,” he said. “Last year it went up 57 percent; this year it went up 115 percent.”
Kiss said his agency was not caught off-guard by the decrease in coal severance taxes…