State tax collections in November continued to top expectations as federal pandemic stimulus funding continues to churn the state economy.
For November, the state collected a total of $342.49 million in tax revenue, about $20.05 million, or 6%, above estimates for the month, according to data from the state auditor and Senate Finance Committee.
It was also up about $19.6 million over November 2019 collections.
Personal income tax collections of $149.83 million led the way, coming in $14.8 million ahead of estimates.
The other key pillar of state revenue collections, consumer sales taxes, also topped expectations, coming in $6.66 million over estimates at $133.61 million.
That combined revenue surplus of nearly $21.5 million helped offset a number of underperforming tax collection categories for the month, notably including severance tax collections of $21.02 million.
Severance taxes came in $5.28 million, or 20%, below estimates for the month, and are down $4.67 million from November 2019. That number is also down $16.26 million, or about 44%, from January 2017 collections of $37.28 million, in the first month of Donald Trump’s presidency.
At a budget briefing in October, Gov. Jim Justice noted severance tax collections had shrunk to a point where they are no longer a major component of the state budget.
“We’re not going to forget our miners. We’re not going to forget our gas industry, but truly, truly we’re a much more diversified economy,” he said at the time.
Also missing revenue projections were:
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n Tobacco taxes, at $12.57 million, coming in $730,000 below estimates.
n Corporate net taxes, at $2.14 million, 57% below estimates of $5 million.
n Business and Occupation taxes, at $8.78 million, $520,000 below estimates.
Justice and Revenue Secretary Dave Hardy have downplayed the impact of the infusion of more than $3 billion of federal pandemic stimulus funds into the state as being a significant factor in strong state tax collections.
A study released last month by Pew Charitable Trusts showed that those stimulus funds caused personal income in West Virginia to jump 14.4% in the second quarter of 2020 — the sixth-highest spike in the U.S., and well above the national average of a 9.7% increase.
“The spike in government assistance was the main reason that the sum of residents’ personal income soared in every state in the second quarter of 2020, despite a record-setting drop in U.S. economic activity due to the pandemic,” the Pew report noted.
The Institute on Taxation and Economy Policy found that $1,200 federal stimulus checks sent out early in the pandemic amounted to a $1.87 billion cash infusion into the state economy, while the West Virginia Center for Budget and Policy concluded the $600-per-week of supplemental unemployment benefits under the federal CARES Act brought another $426 million into the state.
That was followed by $400 weekly supplemental unemployment payments funded largely through federal FEMA funds.
Additionally, the state received a total of $1.27 billion of CARES Act funds, although as of Monday, $819.77 million of those funds have yet to be expended, according to the Auditor’s Office.
The Justice administration did not immediately comment on the revenue numbers, although revenue collections likely will be a topic Justice addresses during his state COVID-19 briefing on Wednesday.
