West Virginia tax collection for August came up $16.4 million short of projections, but state Revenue officials are optimistic things will turn around in September.
“We’re eager to get September numbers,” Revenue Secretary Dave Hardy said Monday. “We’re cautiously optimistic that, with what we’ve seen in July and August, September is going to be good, as well.”
For the first two months of the 2017-18 budget year, which began July 1, the state has collected $559.47 million in taxes, missing projections by $19.27 million, but ahead of the same point in 2016 by $20.75 million.
Deputy Revenue Secretary Mark Muchow said personal income tax and severance tax collection underperformed in August — and blamed the latter on a seasonal downturn in natural gas prices because of lower demand in warm-weather months.
“The natural gas situation, I believe, is going to turn around as we head into the winter months and natural gas prices turn around,” Muchow said of severance taxes. “We’re pretty confident energy markets, particularly natural gas, will pick up.”
August severance tax collection of $28.6 million came in $7.88 million, or 12 percent below estimates. That, coupled with personal income tax collection of $127.2 million that missed estimates by $10.5 million, or about 8 percent, were the prime contributors to the revenue shortfall for the month.
Overall, the state collected a total of $306.69 million of tax revenue in August, coming in 5 percent below estimates and $7 million below August 2016 collections.
August revenue collection would have looked worse, were it not for a $5.6 million transfer from the workers’ compensation debt fund — one of the measures approved by state legislators in June to help close projected shortfalls in the 2017-18 state budget.
Muchow echoed Hardy’s statement about September, saying it will be “the first key test month of the year.”
Quarterly income tax estimated payments, for personal and corporate net income, are due in September, and Muchow said he believes those payments will be up.
“We’re looking for income tax to boost September numbers a little bit,” he said.
One reason for encouragement is that payroll withholding tax collection is up more than 4 percent so far this budget year, he said.
Meanwhile, Road Fund collections for the first two months of the budget year are up 14 percent, or $17.24 million, over the same point last year, at $142.83 million.
Muchow said that’s the result of increases in the gas tax, in multiple Division of Motor Vehicles fees and the motor vehicle privilege tax, enacted by the Legislature in June, which went into effect July 1.
Those revenue increases will be set aside to finance up to $1.6 billion in road bonds, if voters approve a bond referendum on Oct. 7.
Reach Phil Kabler at email@example.com, 304-348-1220 or follow @PhilKabler on Twitter.