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July's state tax revenue collections fall short of projections

Like flowers in the summer heat, West Virginia revenue collection wilted in July as sales taxes, personal income taxes and severance tax collection came up short of projections, according to data released Thursday by the Senate Finance Committee.

For July, the first month of the 2019-20 budget year, a revenue collection of $354.68 million technically exceeded projections by $37 million. However, as the Senate report noted, each year, the governor “borrows” $70 million from the state’s Rainy Day emergency reserve fund to avoid cash-flow issues at the start of the budget year, which began July 1. Each September, that loan is repaid to the Rainy Day fund.

Without that $70 million cash infusion, the Senate report noted, West Virginia missed the projected July revenue collection of $317.65 million by $33 million, taking in $284.68 million in taxes, a shortfall of 10.4 percent.

That marks the second straight month that state revenue collection has missed projections, with June falling 2 percent short of estimates.

The dismal revenue report comes one year after Gov. Jim Justice called a news conference and handed out flower leis to celebrate July 2018 revenue collection that exceeded projections by 12 percent, or $32.4 million.

At the time, Justice dismissed concern that the numbers might reflect a cyclical upturn in energy prices and production, as well as a spike in construction employment driven by natural gas pipeline and road construction projects. Instead, he credited the Republican-controlled Legislature, President Donald Trump and himself for the strong revenue report.

Among the more ominous figures in the July 2019 report is a severance tax collection of negative-$3.5 million, $14.9 million below projected revenue of $11.4 million.

July frequently is a tough month for severance tax collection, a month when portions of the severance tax fund are used to make transfer payments to energy-producing counties and to pay into the state’s Infrastructure Bond Fund.

Last July, the government had projected $900,000 in severance tax losses, but severance tax collection actually finished $12.63 million in the black.

July 2019 is the first month that the severance tax on steam coal dropped from 5 percent to 4 percent, under legislation passed this year. The tax will drop to 3 percent next year, costing the state about $60 million a year in lost revenue.

Meanwhile, the two main pillars of state tax collection — sales taxes and personal income taxes — both missed projections in July.

Sales tax revenue, a key measure of economic activity, came in $7.5 million below projections, at $80.5 million, a 9 percent shortfall.

That also is down $6.5 million — or 7.5 percent — from July 2018 sales tax collection of $87 million.

Personal income tax collection of $135 million missed projections by $16.7 million, or 11 percent. That also is $10.5 million below the July 2018 income tax collection, a decline of about 7 percent.

For the third straight month, the Senate Finance Committee preemptively released the monthly revenue numbers ahead of the governor, apparently as part of an ongoing feud between Senate leadership and Justice.

Traditionally, monthly revenue reports have been released to the news media via telephone conference calls by the Department of Revenue and state Budget Office. However, beginning in spring 2018, Justice started calling news conferences to tout strong revenue collection, on at least two occasions, handing out flower leis to celebrate the rosy economic outlook.

Beginning with the May 2019 revenue report, in an apparent effort to steal the governor’s thunder, Senate Finance has been releasing the revenue data before the Governor’s Office can schedule news conferences.

Reach Phil Kabler at

philk@wvgazettemail.com, 304-348-1220

or follow @PhilKabler on Twitter.

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.