Latest News, Uncategorized, WVPA Sharing

Revenue collections for November falls short by $4 million


The Register-Herald

CHARLESTON — The bleeding in West Virginia’s revenue collections continued in November with numbers falling short of estimates by $4.1 million.

However Department of Revenue Cabinet Secretary Bob Kiss said Thursday those numbers may be a bit deceiving. He said he anticipates a growing deficit moving forward, but maybe not on as quick a pace as in recent months.

General revenue collection for November was $295.6 million.

“You look at the revenue numbers and we missed the revenue estimate by $4 million,” Kiss said. “That’s not good news …”

For first five months of fiscal year 2017, collections have fallen $91.5 million below estimate, but are $13.2 million above last year’s receipts.

Kiss said remedies the governor put into place — the 2 percent mid-year across-the-board cuts and the redirect of about $10 million from the old workers’ comp fund into the general fund — also play into November’s numbers.

“If not for that, it would have been larger. The good news is the governor’s actions have started to remedy the shortfall,” Kiss said.

Deputy Revenue Secretary Mark Muchow noted the hardest hit areas were personal income tax, $43.6 million below estimates; consumer sales and service tax, $36.2 million below estimates; corporate net income tax, $15.3 million below estimates; and severance tax, $13.5 million below estimates.

After experiencing a jump in October, personal income tax fell by 9.7 percent from last year. A large part of the decline was likely due to timing factors than a decline in wage income, according to the Department of Revenue.

Although severance tax collections were slightly above estimate, it was nearly 22 percent below the previous year. Cumulative general revenue fund collections were $13.5 million below estimate and collections were unchanged from the previous year-to-date.

According to the news release, the collection deficit is largely attributed to lower natural gas prices, which fell over the summer. However, recently the gap narrowed, which could bode well for the second half of the fiscal year if the price increases are here to stay.

For corporate tax, which has experienced a national decline, cumulative collections for November were below estimate and cumulative receipts were more than 44 percent below the last year’s receipts.

Collections for tobacco tax were above estimate and were $5.5 million above estimate and nearly double previous year receipts, according to the data.

Collections for the state road funds were $4.4 million above estimates and 9.3 percent below the previous year. Cumulative state road funds collections were $16.3 million above estimate and 2.3 percent above the previous year.

In Tuesday’s interim Joint Finance Committee meeting, Kiss said the across-the-board cuts are not going to fix the problem.

When Delegate Eric Nelson, R-Kanawha, asked him why the governor was taking what he called the “easy way out” with across the board cuts, Kiss responded that targeted cuts need statutory changes and said even the governor agrees that these kinds of cuts have gone about as far as they can go without involving layoffs.

Kiss also said the total budget deficit for the year comes to about $165 million. He said officials are still looking at other remedies.

“One thing we haven’t done is allocate one-time money such as the Rainy Day Fund,” Kiss said. “A large part is the governor can’t do that by himself. The Legislature has to appropriate that money.”

Kiss said when the session starts in January, the governor may introduce a supplement to that effect.

“The real challenge is the whole design of the Rainy Day Fund to allow you to buy time to have a soft landing when you have difficult budget years. …It’s a savings account. Anyone who runs out realizes you can’t live forever on a savings account if the income doesn’t meet the expenses,” he said.

Kiss said Tuesday if the budget stays where it has been these last few years, assuming no revenue adjustments and assuming everything gets funded, the deficit could be “north of $400 million.” However, Kiss said he still does not have the revenue estimates for 2018 yet.

See more from The Register-Herald

Comments are closed.

Subscribe to Our Newsletter