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Plunging energy prices lead to W.Va. tax shortfall

CHARLESTON, W.Va. — West Virginia tax collections continued to lag in October, as extremely low prices for natural gas and coal continue to drag down severance tax collections, state Department of Revenue officials said Tuesday.

For the month, the state collected total revenue of $299.8 million, which was $23.8 million or 6 percent below estimates. The shortfall was basically entirely attributable to severance tax collections, which came in $24.95 million below projections.

“We still don’t know all the answers or where the bottom is or what the ultimate deficit numbers are going to be,” Revenue Secretary Bob Kiss said during a monthly budget briefing.

He said that when state officials put together the 2015-16 budget estimates in November 2014, none of the economic forecasters the government relies on foresaw the “magnitude or suddenness” of plunging energy prices.

Last month, as it became evident the state would not meet its 2015-16 revenue projections, Gov. Earl Ray Tomblin ordered 4 percent spending cuts for most state agencies in order to save $94 million.

Through the first four months of the budget year, overall tax collection of $1.23 billion is $91.6 million below projections — which Kiss said means the spending cuts are currently covering the shortfall, but with two-thirds of the budget year still ahead.

If energy prices and production remain low for an extended period, Kiss said, “It’s going to wind up creating tremendous stress…

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