The Mountain State’s TRUSTED news source.

Click here to stay informed and subscribe to The Charleston Gazette-Mail.

Click #isupportlocal for more information on supporting our local journalists.


Learn more about HD Media

Pipeline stockpile

Pipeline stockpile Rows of pipe are stockpiled off U.S. 19, near the Raleigh-Fayette county line, in preparation for construction of the Mountain Valley Pipeline, one of several large natural gas pipelines that will crisscross West Virginia.

With West Virginia in its eighth straight month of positive revenue reports, including double-digit growth in income tax and sales tax collection, Deputy Revenue Secretary Mark Muchow provided a bit of a reality check to members of a Finance legislative interim committee Monday.

In response to a question from Delegate Jim Butler, R-Mason, about possible warning signs in the otherwise rosy revenue outlook, Muchow said that more than $4 billion in natural gas pipeline construction projects currently underway statewide are helping fuel the economic upturn.

Those projects are scheduled to be finished late in 2019, at which point Muchow said there will be a measurable drop in economic activity in the state.

“When that comes off, it will be very noticeable,” he said. “There will be a dropoff in personal income taxes and consumer sales taxes.”

By comparison, highways construction fueled by the governor’s Roads to Prosperity bond issues is providing about $500 million a year of economic impact, he said.

Muchow noted that, year-to-date, payroll withholding taxes are up 11.7 percent, while state employment rates are up 1.9 percent — a factor reflecting that many of the gas pipeline workers are from out of state.

Through November, budget year-to-date revenue collection is up 13.2 percent over the same point in 2017, and total revenue is $141 million above estimates.

Muchow said that, in addition to construction, state revenue also is benefiting from a jump in coal exports and a stabilization of natural gas prices. However, industry projections are calling for a drop in coal exports and lower natural gas prices in 2019, he said.

Likewise, a slowdown in the global economy likely would bring down coal and natural gas prices, Muchow said.

“I think caution is a good word to use here,” he said.

Butler agreed, calling for restraint in spending in the upcoming 2019-20 state budget.

“I think we need to be careful with what we’re doing, based on history,” he said.

Reach Phil Kabler at

philk@wvgazettemail.com,

304-348-1220 or follow

@PhilKabler on Twitter.

Recommended for you