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Gov. Justice: State’s economy keeps growing, October marks 7th consecutive month of revenue surplus over estimates

11/10/2018

CHARLESTON, WV – Gov. Jim Justice announced today that the state’s General Revenue Fund collections continue to exceed estimates. October General Revenue Fund collections of $359.2 million were nearly $2.4 million above estimate. That is 1.5% above prior year receipts.

“West Virginia’s economy continues to move forward and Revenue Fund collections keep exceeding the estimates for Fiscal 2019,” Gov. Justice said. “This is a great story that keeps getting better and the numbers keep supporting it.”

The 13.5% growth rate after the first four months of FY 2019 is the highest growth rate in State General Revenue Fund collections through the first four months in more than 25 years and the cumulative rate of growth in sales tax collections is the highest rate of growth in sales tax revenue in more than 25 years.

October 2018 also marked the 7^thconsecutive month of revenue surplus over estimate.

Year-to-date collections of nearly $1.478 billion were $122.3 million above estimate and 13.5% ahead of prior year receipts. Year-to-date General Fund Severance Tax collections were 50.4% ($40.7 million) ahead of last year. Year-to-date General Fund Consumer Sales Tax collections were 14.4% ($53.7 million) ahead of last year. Year-to-date Personal Income Tax collections were 11.7% ($69.0 million) ahead of last year. Year-to-date Corporation Net Income Tax collections were 15.1% ($6.5 million) ahead of last year.

The following is a summary of collections for October:

General Revenue Fund

October General Revenue Fund collections of $359.2 million were nearly $2.4 million above estimate and 1.5% above prior year receipts.

Year-to-date collections of nearly $1.478 billion were $122.3 million above estimate and 13.5% ahead of prior year receipts. The sharp rise in collections was attributable to very high rates of growth in Severance Tax, Consumer Sales Tax, Personal Income Tax and Corporation Net Income Tax collections. Year-to-date General Fund Severance Tax collections were 50.4% ($40.7 million) ahead of last year. Year-to-date General Fund Consumer Sales Tax collections were 14.4% ($53.7 million) ahead of last year. Year-to-date Personal Income Tax collections were 11.7% ($69.0 million) ahead of last year. Year-to-date Corporation Net Income Tax collections were 15.1% ($6.5 million) ahead of last year.

A summary of major components follows:

October Personal Income Tax collections of $155.7 million were $6.5 million below estimate and 0.2% below prior year receipts. Cumulative collections were still $37.3 million above estimate and 11.7% ahead of prior year receipts. The decrease in monthly net revenue from the prior year was due to lower than expected withholding tax receipts. After rising by 25.7% in September, income withholding tax payments of $138.5 million were 1.5% below prior year receipts. However, combined September-October collections were still nearly 11.0% ahead of last year. Cumulative withholding tax collections of nearly $557 million were also 11.0% above prior year receipts. Withholding tax collections previously grew by 9.1% during the final three months of FY2018. Data from the WorkForce WV September employment report show private sector employment growth of 0.7% over the prior year with more than 40% of the job growth concentrated in the construction sector.

October Consumer Sales and Use Tax collections of nearly $100.0 million were $4.2 million above estimate and 7.6% above prior year receipts. Cumulative collections were $25.4 million above estimate and 14.4% ahead of prior year receipts. Overall collection growth, including transfers to special revenue funds, was a robust 11.0% for the year-to-date. After rising at a more modest clip of roughly 2% during most of last year, total sales tax collections rose at much higher rates of 7.8% in June, 13.3% in July, 12.9% in August, 10.1% in September and 9.4% in October, respectively.

October General Revenue Fund Severance Tax collections of $24.8 million were $5.4 million above estimate and 2.0% ahead of prior year receipts. Year-to-date collections were nearly $40.4 million above estimate and 50.4% ahead of prior year collections. Total cumulative severance tax collections for all funds were up by 38.2%. Recent strong growth in collections was partially attributable to growth in the value of foreign exports of coal. In addition, natural gas prices are trending a bit higher than last year with greater summer price stability this year.

October Corporation Net Income Tax collections of nearly $2.3 million were $3.2 million below estimate and 62.5% lower than prior year receipts. The decrease in collections was due to a $5.8 million increase in monthly tax refunds from the prior year. Gross tax receipts for the month were actually up by nearly 27% from the prior year. Cumulative net collections of more than $49.3 million were $7.1 million above estimate and 15.1% ahead of prior year receipts.

Tobacco Products collections totaled more than $14.0 million in October, an amount that was $0.8 million below estimate and 3.4% above prior year receipts. Cumulative collections were still nearly $0.3 million above estimate and 0.5% below prior year receipts.

October Business and Occupation Tax collections of nearly $12.8 million were roughly $1.4 million above estimate. Cumulative collections of $38.6 million were more than $2.7 million above estimate and 4.2% ahead of prior year receipts.

Insurance Premium Tax collections of $30.8 million were $1.7 million above estimate in October. Year-to-date collections of $60.7 million were $3.0 million above estimate and 3.8% ahead of last year due to higher insurance premiums in a growing economy.

State Road Fund

In October, total State Road Fund collections of $80.8 were $55.6 million below estimate and 23.9% below prior year receipts. The shortfall was largely due to a $44.8 million shortfall in federal reimbursements. All other collections were collectively $10.8 million below the monthly estimate and 7.5% below prior year receipts due to various revenue timing variances from the prior year. Motor Fuel Excise Tax collections fell short of the monthly estimate by nearly $9.1 million after exceeding estimate by $7.3 million in September. A significant portion of the Motor Fuel Excise Tax due on October 31st was not remitted by affected Taxpayers until early November. Monthly License and Registration Fee collections were nearly $3.7 million below estimate and 9.6% below prior year receipts. Monthly Motor Vehicle Sales Tax collections of $21.7 million were $1.6 million above estimate and 10.6% ahead of prior year receipts.

Cumulative State Road Fund collections of $452.1 million were $57.3 million below estimate and 4.7% ahead of prior year receipts. Discounting federal reimbursements, total collections of $314.9 million were nearly $20.0 million above estimate and 7.1% ahead of prior year receipts. Cumulative Motor Fuel Excise Tax collections were $6.3 million above estimate and 11.5% ahead of last year. Cumulative License and Registration Fees were $6.3 million ahead of estimate and 9.7% ahead of last year. Cumulative Motor Vehicle Sales Tax collections were nearly $8.4 million above estimate and 13.7% ahead of prior year receipts.

For details on other revenues, go to
www.budget.wv.gov/reportsandcharts/revenuereports

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Butch Antolini

Gov. Justice: State’s economy keeps growing, October marks 7th consecutive month of revenue surplus over estimates

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