W.Va. tax revenue down in November
CHARLESTON, W.Va. -- With nearly $28 million of severance tax payments arriving at the Tax Division on Monday and Tuesday, dismal state revenue collections for November don't look quite as bad, West Virginia Deputy Revenue Secretary Mark Muchow said Tuesday.
For November, the state collected $256.5 million in taxes, about $14.9 million below projections for the month. That left the state $57.39 million short of estimates for the 2013-14 budget year to date, with $1.54 billion in tax collections.
However, part of the shortfall occurred because severance taxes and business and occupation taxes are due on the last day of the month - which, this November, fell on the Thanksgiving holiday weekend, Muchow noted.
"November's loss will be December's gain," he said. "It's a dreaded timing issue."
Severance tax collections for November of $20.67 million fell $14.3 million short of estimates, accounting for most of the revenue shortfall for the month, Muchow said.
Had the $27.8 million of severance tax payments received this Monday and Tuesday been booked to November, overall tax collections would have exceeded estimates, he said.
It also drops the year-to-date deficit from more than $57 million to "the mid-40s range," Muchow said.
However, he noted, "We still have yet to have a month this fiscal year where we exceeded estimates."
To avoid a revenue shortfall, and potential midyear spending cuts, Muchow said tax collections need to grow by 3.6 percent for the remainder of the budget year, which he said is not out of the realm of possibility -- but the state would need to see that upturn shortly.
"The longer we wait, it makes that cliff a little bit harder to climb," he said.
He said there are some encouraging signs, including personal income tax collections of $106.8 million for November, just $1.8 million below estimates. (For the budget year to date, personal income taxes are running 5 percent below estimates.)
"We're seeing a little bit of uptick in payroll and employment numbers," Muchow said.
Sales tax collections -- the other major component of state tax revenue -- were down about $660,000 in November, at $96.23 million, and are running slightly behind projections year to date, at $499.38 million. Muchow said the downturn is attributable to the elimination of the 1 percent sales tax on food July 1.
Reach Phil Kabler at firstname.lastname@example.org or 304-348-1220.