Gov. Justice reports May revenue collections $20.2 million above estimates, state on track to finish FY 2018 with a budget surplus
CHARLESTON, WV – Gov. Jim Justice said today that West Virginia’s revenue collections continued a trend of exceeding estimates again in May and the state is on track to have a budget surplus at the end of the current fiscal year (FY18) on June 30.“Our prudent management of the state’s finances continues to bear fruit and this is more great news for West Virginia,” said Gov. Jim Justice. “We’re headed for a budget surplus at the end of the month and the movement forward looks promising as we prepare to start FY 2019. When I took office in January 2017 the state was flat out bankrupt. This has now been turned completely around and we are in the black. It really is nothing short of a miracle. This is a great story that I continue to say needs to be told.”May collections of $328.9 million were $20.2 million above estimate, with year-to-date collections of nearly $3.83 billion being equal to 100.4 percent of the year-to-date estimate and more than $124 million higher than last year. The cumulative surplus was $15.5 million.“We will continue to closely monitor collections during the month of June as we approach the end of the fiscal year,” said Revenue Secretary Dave Hardy. “Our revenues are stable, which gives us confidence as we enter the new fiscal year on July 1.”May revenue highlights include:
General Revenue FundMay General Revenue Fund collections of $328.9 million were $20.2 million above estimate, but 6.1% below prior year receipts due to normal timing alterations from the prior year calendar. May collections were bolstered by a near $7.5 million monthly surplus of appropriated Lottery Fund Transfer receipts and a bigger than expected carryover of annual return payments due in April. In addition, corporation net income tax, business and occupation tax and severance tax collections all exceeded their monthly estimates. Cumulative General Revenue Fund collections of more than $3.82 billion were $15.5 million above estimate and 3.4% (i.e., $123.4 million) above prior year receipts. Results for major taxes are highlighted below.May Personal Income Tax collections exceeded estimate by nearly $8.5 million due to a larger than expected carryover of April return payments to early May and a 69.2% rise in monthly non-resident withholding tax collections. After rising by a stronger than expected 10.4% in the prior month, May withholding tax receipts were above prior year receipts by 4.1%. Cumulative withholding tax collections of more than $1.42 billion were 5.4% above prior year receipts. Total monthly personal income tax receipts were above prior year collections by 6.2%. Cumulative General Revenue Fund personal income tax collections of more than $1.73 billion were $60.8 million above estimate and 6.4% ahead of prior year collections. Consumer Sales and Use Tax receipts exceeded estimate by nearly $0.4 million in May. After adjustments for municipal sales tax collections and special revenue transfers, State sales tax revenue decreased by 1.3% for the month due mainly to a net $2.4 million increase in tax refund payments over the prior year. Absent the impact of the higher tax refunds, monthly gross State revenues were roughly 1.0% higher than last year. The small monthly surplus decreased the cumulative deficit in General Revenue Fund sales tax collections to $26.5 million. Due to an increase in transfers to special revenue funds, cumulative General Revenue Fund sales tax collections were up by 1.2% as compared with an overall net increase in State sales tax collections of 2.1%. Sales tax collection revenue growth is expected to trend up modestly over the remaining month of this year due to growth in disposable income and increased construction industry activity.General Revenue Fund Severance Tax collections totaled more than $36.8 million for the month, an amount that was $1.8 million above estimate. Monthly collections were 25.2% below prior year collections due to a smaller carryover in receipts from late April this year versus late April last year. Cumulative General Revenue Fund Severance tax collections of $310.5 million were nearly $14.0 million below estimate, but 13.3% above prior year-to-date receipts. Overall collections were up 12.0% from prior year-to-date receipts. Following a period of slower growth during late Summer and Autumn, Severance Tax collections for the final quarter of this fiscal year are expected to generally meet or exceed estimate.Corporation Net Income Tax collections totaled $5.4 million in May. Monthly collections were $3.8 million above estimate and 8.2% above prior year receipts. Gross collections for the month were more than 36% higher than last year. Year-to-date net collections of $92.1 million were $5.6 million above estimate and 0.8% ahead of last year.May Insurance Premium Tax collections totaled less than $0.1 million, an amount that was 99.6% less than prior year receipts. The drop in May receipts was due to an acceleration of collections into late April in comparison with last year. Collections were $3.9 million below estimate for the month. However, cumulative receipts of $123.5 million were still $2.6 million above estimate and 3.7% ahead of last year. May B&O Tax collections of nearly $11.0 million were $1.4 million above estimate. Cumulative collections of nearly $105.0 million were $0.2 million above estimate and 2.9% above prior year receipts.Tobacco Product Excise Tax collections totaled nearly $16.0 million in May. Monthly collections were $0.8 million below estimate. Cumulative collections of $162.3 million were $14.6 million below estimate and 8.7% below prior year receipts.State Road Fund May State Road Fund collections of $71.8 million were $9.9 million below estimate and 3.7% below prior year receipts. The decline in May receipts from the prior year was due to a shift of significant Motor Fuel Excise Tax collections to late April this year relative to last year. Due to the revenue timing change, monthly Motor Fuel Excise Tax receipts were $7.2 million below estimate and 21.8% below prior year receipts. Cumulative Motor Fuel Excise Tax collections were $1.1 million above estimate and 11.4% ahead of prior year receipts. Monthly License and Registration Fee collections were $8.4 million below a revised estimate and 14.3% ahead of last year. Due to the recent fee increases, cumulative License and Registration Fees were $12.5 million above a revised estimate and 50.3% ahead of prior year receipts. Motor Vehicle Sales Tax collections exceeded the monthly estimate by $5.8 million, but still fell short of cumulative estimate by $1.0 million. Cumulative State Road Fund collections were $12.5 million above estimate and 16.5% above prior year receipts. For details on other revenues, go to www.budget.wv.gov/reportsandcharts/revenuereports
- Personal income tax collections exceeded estimate in May by nearly $8.5 million, partly due to a 69% gain in nonresident withholding tax collections. Cumulative collections of nearly $1.74 billion were $60.8 million above estimate and 6.4% ahead of last year.
- Corporation net income tax collections exceeded the May estimate by $3.8 million. Year-to-date collections were $5.6 million above estimate and 0.8% ahead of last year.
- Severance tax collections exceeded estimate by more than $1.8 million in May. Year-to-date collections of $310.5 million were 13.3% ahead of last year.
- Business and occupation collections were $1.4 million ahead of estimate in May. Cumulative receipts were $0.2 million ahead of estimate.
- Consumer sales tax collections exceeded estimate in May by $0.4 million. Cumulative general revenue fund sales tax collections of more than $1.1 billion were still $26.5 million below estimate and just 1.2% ahead of last year.
- General Revenue Fund collections remain on target to meet or exceed year-end estimates.
- Cumulative State Road Fund collections of nearly $738.5 million were $12.5 million above estimate and 16.5% ($104.7 million) ahead of last year.
Butch Antolini, Butch.Antolini@wv.gov