We’re glad to see state revenue numbers for September cut into what was shaping up to be a $50 million budget shortfall for West Virginia’s state government.
The state exceeded revenue projections by about $20 million, or 4 percent, according to an article by the Gazette-Mail’s Phil Kabler.
As Kabler reported, a spike in last month’s numbers was expected because the last day for August tax collections was a Saturday, pushing the collections of most taxes due at the end of the month into September.
Revenue numbers have been failing to hit projections lately, mainly because of a downturn in construction — which provided a temporary economic boost — and lower revenue from the coal severance tax (partly because of lower production in the industry and partly because the Legislature lowered the tax rate).
Severance tax collections for September actually exceeded the projected mark by about $411,000, which is a positive sign. Personal income tax revenue missed its projection by about $244,000, but the sales tax generated $125.82 million, beating projections by $1.6 million.
Last year, as the state celebrated record revenue collections in press conferences where Gov. Jim Justice would parade out state officials and hand out flower leis, economists warned a downturn was coming in late 2019. For the most part, they’ve been right so far, but cutting what was an estimated $50 million deficit to $29.8 million in a single month is encouraging.
What is perhaps more encouraging is Gov. Justice’s realistic assessment of the numbers going forward. After all, just as one good month can offer relief from a shortfall, another bad one could put the state right back in a deeper hole. Justice didn’t issue statements or host any press conferences as revenue started to dip consistently down. (What politician would?) But he also showed some temperance by not going over-the-top in celebratory fashion when September’s numbers came in and provided a huge cut of the projected deficit.
“We saw our numbers turn around for the good again here in September, but, if nothing else, our first quarter this year shows that we have to continue to err on the side of caution,” Justice said.
This might be the most grounded thing the governor has said since taking office. Let’s hope he’s right.