Gov. Justice: Surplus biggest in history for first six months of fiscal year
From the Office of the Governor:
CHARLESTON, WV – Gov. Jim Justice announced today that December General Revenue Fund collections came in $44.8 million over projections and pushed the Fiscal Year 2019 collections to $185.9 million above estimates, resulting in the biggest surplus in the state’s history during the first six months of any fiscal year.
“These numbers are unbelievable,” Gov. Justice said. “I think the best way to qualify this is that we have the biggest surplus in history for our state for the first six months of a fiscal year. It’s really good when you consider where we were two years ago.”
Highlights from December’s report include:
Year-to-date collections of more than $2.234 billion were $185.9 million above estimate and 13.5% ahead of prior year receipts. The sharp rise in collections was attributable to very high rates of growth in Severance Tax, Corporation Net Income Tax, Consumer Sales Tax and Personal Income Tax collections. Year-to-date General Fund Severance Tax collections were 51.1% ($70.7 million) ahead of last year. Year-to-date Corporation Net Income Tax collections were 42.2% ($29.0 million) ahead of last year. Year-to-date General Fund Consumer Sales Tax collections were 13.3% ($79.2 million) ahead of last year. Year-to-date Personal Income Tax collections were 9.1% ($80.3 million) ahead of last year.
A summary of major components follows:
December Personal Income Tax collections of $169.9 million were nearly $7.4 million above estimate and 1.3% below prior year receipts. Cumulative collections were $52.0 million above estimate and 9.1% ahead of prior year receipts. The decrease in monthly net revenue from the prior year was due to a sharp decline in return payments and estimated income tax payments from the prior year. Such a decline was anticipated due to expected Taxpayer behavior in response to federal tax reform provisions limiting the amount of the State and local tax deduction to no more than $10,000 per year. These new limitations led some Taxpayers to delay payment of their quarterly estimated state income taxes until the mid-January due date. Income withholding tax payments of $152.5 million were a robust 22.0% above prior year receipts. Cumulative withholding tax collections of $845.5 million were 13.4% above prior year receipts. Withholding tax collections previously grew by 9.1% during the final three months of FY2018. Data from the WorkForce WV November employment report showed private sector employment growth of 0.8% over the prior year with more than 26% of the job growth concentrated in the construction sector.
December Consumer Sales and Use Tax collections of nearly $124.2 million were $7.6 million above estimate and 12.4% above prior year receipts. Cumulative collections were $38.8 million above estimate and 13.3% ahead of prior year receipts. Overall collection growth, including transfers to special revenue funds, was a robust 11.2% for the year-to-date. After rising at a more modest clip of roughly 2% during most of last year, total sales tax collections rose at much higher rates of 7.8% in June, 13.3% in July, 12.9% in August, 10.1% in September, 9.4% in October, 10.7% in November and 11.2% in December, respectively.
December General Revenue Fund Severance Tax collections of $45.3 million were nearly $11.0 million above estimate and 73.9% ahead of prior year receipts. Year-to-date General Revenue Fund severance tax collections were $59.2 million above estimate and 51.1% ahead of prior year collections. Total cumulative severance tax collections for all funds were up by 42.5%. Recent strong growth in collections was partially attributable to growth in the value of foreign exports of coal. In addition, natural gas prices are trending higher than last year with greater price stability this year.
Corporation Net Income Tax collections totaled $48.7 million in December, an amount that was $19.9 million above estimate and nearly 101% ahead of prior year receipts. Cumulative collections of $97.5 million were $25.5 million above estimate and 42.2% ahead of last year. A significant portion of the recent increase in collections was attributable to the energy sector.
Tobacco Products collections totaled nearly $13.9 million in December, an amount that was $2.0 million below estimate and 14.4% below prior year receipts. Cumulative collections were $1.9 million below estimate and 2.9% below prior year receipts.
December Business and Occupation Tax collections of more than $7.9 million were roughly $0.6 million above estimate. Cumulative collections of $53.4 million were $1.5 million above estimate and 9.1% ahead of prior year receipts.
State Road Fund
In December, total State Road Fund collections of $88.0 were $15.1 million below estimate, but still 9.5% above prior year receipts. The shortfall was due to a $14.6 million shortfall in federal reimbursements. All other collections were collectively $0.5 million below the monthly estimate, but 42.2% above prior year receipts. The large gain in revenue from the prior December was due to calendar month timing variation with the last day of December 2017 falling on Sunday and the last day of December 2018 falling on Monday. As a result, monthly Motor Fuel Excise Tax collections due on the last calendar day of each month were more than 116% higher this year as compared with last year. Collections were also more than $1.1 million above the monthly estimate. Following above average collections in November, December License and Registration Fee collections were $3.0 million below estimate and 28.5% below prior year receipts. Monthly Motor Vehicle Sales Tax collections of $15.1 million were $0.8 million below estimate and 2.0% below prior year receipts.
Cumulative State Road Fund collections of $632.8 million were $99.4 million below estimate and 2.0% below prior year receipts. Federal reimbursements were $121.3 million below estimate due to a time lag associated with a recently implemented upgrade in technology. Discounting federal reimbursements, total collections of $449.6 million were $21.9 million above estimate and 5.0% ahead of prior year receipts. Cumulative Motor Fuel Excise Tax collections were $5.2 million above estimate and 17.7% ahead of last year. Cumulative License and Registration Fees were $7.3 million ahead of estimate and 7.4% ahead of last year. Cumulative Motor Vehicle Sales Tax collections were $8.7 million above estimate and 10.5% ahead of prior year receipts.
For details on other revenues, go to www.budget.wv.gov/reportsandcharts/revenuereports https://governor.us15.list-manage.com/track/click?u=d525ab9ade4d860d2b5772468&id=1dfc5c34d4&e=474b15ae1d