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After jump in tax payments, legislators warned not to expect repeat

After jump in tax payments, legislators warned not to expect repeat

West Virginia Revenue Secretary Dave Hardy (left), Deputy Secretary Mark Muchow (center) and State Budget Director Michael Cook walk down the speaker’s corridor next to the House of Delegates chamber Monday afternoon.

West Virginia’s state government experienced a 12 percent jump in tax collection in the recently ended 2018-19 budget year, but Deputy Revenue Secretary Mark Muchow advised legislators Monday not to assume the upturn is boundless.

“Don’t count on that to continue like that,” Muchow told members of the interim Joint Standing Committee on Finance. “That was an unusual year.”

For the budget year, which ended June 30, the state took in $4.756 billion, up $511 million from 2017-18, fueled by growth in the construction industry and a jump in natural gas revenue, he said.

A strong construction sector, driven by pipeline and highways construction, contributed to a 9.9 percent jump in sales taxes and a 9.2 percent improvement in personal income taxes, he said.

Severance tax collection was up 33.7 percent, at $462 million, as local distributions of revenue from oil and natural gas production jumped 60 percent, while distributions from coal production were up 7.5 percent, he said.

Corporate net taxes jumped 80 percent, to $198 million, a factor of companies taking as many tax deductions as possible in 2017-18, in anticipation of massive federal income tax cuts that went into effect this budget year, Muchow said.

Revenue Secretary Dave Hardy said the strong fiscal year allowed the state to transfer $39 million to its Rainy Day emergency reserve funds, bringing the total of the two funds to $752 million, reaching the threshold of about 17 percent of one year’s General Revenue budget that bond rating agencies want the state to maintain.

“I think we all feel like we’re doing something right,” he said.

Meanwhile, during the floor session of Monday’s resumption of an ongoing special session this summer, Delegate Patrick McGeehan, R-Hancock, objected to what he described as out-of-control spending by the state.

He noted that spending has gone from $4.18 billion in the 2017-18 budget to $4.7 billion in the current budget, including a number of one-time supplemental appropriations.

“We’re supposed to be fiscally conservative. We’re supposed to be fiscally responsible,” said McGeehan, who was recently stripped of all committee assignments by House Speaker Roger Hanshaw, R-Clay, apparently over his votes in opposition to the omnibus education bill (House Bill 206) backed by House leadership.

“The surpluses we’re seeing come in now are unsustainable,” McGeehan said.

Road funding

Also Monday, the House of Delegates advanced on voice votes two concurrent resolutions giving Gov. Jim Justice’s office authority to issue the remaining $800 million in road bonds approved by voters in the Roads to Prosperity amendment to the state constitution on Oct. 7, 2017.

That amendment authorizes the sale of $1.6 billion in road bonds to fund highway and bridge construction projects statewide.

In May 2018, the first $800 million in bonds went to market and, with interest, raised about $915 million for road construction.

The resolutions adopted Monday, which await approval by the Senate on Tuesday, would authorize a second bond issue of $600 million by June 30, 2020. That includes $400 million that had an original deadline of this past June 30, but has not yet gone to market, as well as a $200 million bond issue to be sold by the 2020 deadline (House Concurrent Resolution 104).

A second resolution adopted Monday would authorize the sale of the final $200 million of road bonds by June 30, 2021 (HCR 105).

House Finance Chairman Eric Householder, R-Berkeley, said adopting the resolutions now will give the Justice administration flexibility to take the bonds to market when interest rates are lowest.

“The governor could do it a week from now,” Householder said. “He could do it two months from now.”

Reach Phil Kabler at, 304-348-1220

or follow @PhilKabler on Twitter.

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Funerals for Saturday, August 24, 2019

Barron, Dennis - 11 a.m., Airborne Church, Martinsburg.
Baylor, Elizabeth - 1 p.m., Snodgrass Funeral Home, South Charleston.
Bonds Jr., Patrick - 1 p.m., King of Glory International Ministries, Charleston.
Burgess, Corey - 5 p.m., Aldersgate United Methodist Church.
Burns, Helen - 11 a.m., Stump Funeral Home & Cremation, Inc., Grantsville.
Caldwell, Gary - 6 p.m., Long & Fisher Funeral Home, Sissonville.
Casto, Carroll - 1 p.m., Raynes Funeral Home, Eleanor.
Casto, Roger - 2 p.m., Chapman Funeral Home, Winfield.
Duty, Fred - 2 p.m., Handley Funeral Home, Danville.
Fisher, Bernard - 2 p.m., Waybright Funeral Home, Ripley.
Gwinn, Lloyd - Noon, Church of Christ, Craigsville.  
Habjan, Nathan - 1 p.m., Wilson-Smith Funeral Home, Clay. 
Hall, Daniel - Noon, Witcher Baptist Church.
Hinkle, Ethel - Noon, Church of Christ, Craigsville.  
Hoffman, Bruce - 2 p.m., Foglesong - Casto Funeral Home, Mason.  
Kinder, Siegel - 1 p.m., Leonard Johnson Funeral Home, Marmet.
Kyler, Virgil - 11 a.m., Pleasant Grove Cemetery, Reedy.
Palmer, William - 1 p.m., Barlow Bonsall Funeral Home, Charleston. 
Raynes Sr., Steven - 1 p.m., Tyree Funeral Home, Oak Hill.
Truman, James - 2 p.m., Newton Baptist Church, Newton.
Turner, Keith - Noon, Full Gospel Assembly,  Huntington. 
Webb, Antoinette - 11 a.m., SS Peter and Paul Catholic Church, Oak Hill.
Wilson, Greg - Noon, Roach Funeral Home, Gassaway.
Withrow, James - 1 p.m., Cooke Funeral Home Chapel, Cedar Grove.