West Virginia reports $3.8 million surplus
CHARLESTON, W.Va. -- A boost in corporate tax collections and a rebound in severance taxes helped deliver a $3.8 million surplus for the state's general revenue fund in October.
The surplus helped to bring state revenue collections virtually in line with expectations for this point in the fiscal year.
The state brought in $345.9 million in general tax collections during the month, according to data from the State Budget Office. That was about 1 percent more than the $342 million revenue officials were expecting for October.
The better-than-expected collections helped offset a $4.6 million revenue deficit that had accumulated over the first quarter of the state's fiscal year. Revenue collections since July 1 are now running just $825,000 behind estimates.
Deputy Revenue Secretary Mark Muchow said improvements in corporate and severance tax collections helped drive the October surplus.
The $14 million in corporate income and business franchise taxes collected last month was twice the amount collected in October 2011.
Muchow said the doubling of corporate tax receipts was due in part to the fact that the state paid out less in tax refunds last month. The $1.5 million in October refund payments was more than $4 million less than the $5.7 million paid out during October of last year.
Still, corporate revenues appear to be faring better this year than last. Since July 1, business tax collections are running 21 percent ahead of expectations.
"Cumulative collections for this volatile revenue source are nearly $13.9 million ahead of estimate and 0.4 percent ahead of prior year receipts," Muchow said.
October was also the first month of the fiscal year for severance tax collections to beat expectations. The $54.1 million in severance taxes collected in October was $7 million ahead of the $47 million forecast.
Declines in state coal production caused severance taxes to lag in recent months.
While October showed improvement, Muchow said this was due more to the way the calendar affected the timing of payments than to increased production.
"The monthly surplus in Severance Tax receipts was largely attributable to the combination of a greater-than-anticipated revenue carryover from September and two additional collection days for October of this year," Muchow said.
Surpluses in corporate and severance tax collections helped offset a $7 million shortfall in personal income tax collections in October.
For the month, the state collected $116.8 million in personal income taxes, well short of the $123.7 million that had been expected. Collections were down 5.6 percent from October last year.
Muchow said declines in coal industry employment have been weighing on personal income tax withholdings this fiscal year. The amount of taxes withheld from paychecks in October was 9.4 percent less than last year.
Consumer sales tax collections were $1.2 million ahead of estimates in October, a sign of healthy consumer activity. The $405.1 million in consumer sales taxes collected since July 1 is $3.8 million above estimates.
Muchow said that surplus was "at least partly due to the increased natural gas drilling activities and related spending by workers in the Northern Panhandle of the state."
Contact writer Jared Hunt at firstname.lastname@example.org or 304-348-5148.