West Virginia Tax Collections Now $1.1B Above Budget for Fiscal Year

March 3, 2023

Mountaineer News

WV Budget News

CHARLESTON, WV - West Virginia collected $407 million in taxes and fees in February, more than $110 million ahead of the budgeted estimate for the month.

That puts the state $1.1 billion ahead of the budgeted estimates for the fiscal year through nine months.

The $4.1 billion in total collections for the fiscal year are up from $3.5 billion at this point a year ago, when the state collected $385 million in February.

The largest overage comes from consumer sales and use taxes, where $143 million was collected across the state for February and $1.1 billion has been collected for the fiscal year compared to estimates of $117 million for the month and $981 million for the fiscal year.

Another large portion of the overage was severance tax collections, which are taxes for mining minerals such as coal, oil, natural gas, limestone, and sandstone among others.

The state collected $71 million in severance taxes compared to the $28 million that was budgeted and has collected $702 million for the year compared to the $161 million estimated.

The overages come as state leaders are working on income tax cut measures that have passed the Senate and will next be taken up by the House.

The West Virginia Center on Budget and Policy noted that the tax collection estimates have remained steady for years but Gov. Jim Justice recently raised the estimates for next fiscal year.

“After four years of artificially holding the budget flat to create an illusion of surpluses to drive the narrative for income tax cuts,” the center wrote. “Governor Justice’s revised revenue estimate seemed timed to provide the space needed to cut taxes. Unfortunately, there was no magic revenue adjustment when thousands of families lost their childcare subsidies, schoolchildren were facing homelessness, or state agencies were understaffed.

“That said, all of those issues still remain and the additional space provided by the revenue estimate adjustment presents policymakers with a profound choice: invest those funds in state programs and services that have not seen increased investments in years or give tax cuts to mostly wealthy households.”