CHARLESTON – The West Virginia Department of Revenue released revenue numbers for the month of September.
As of Sept. 30, general revenues are more than $60 million behind estimates, a figure that has grown quickly from a $12 million deficit at the end of August, according to the report.
Specifically, General Revenue Fund collections for August were slightly more than $379 million and cumulative collections totaled nearly $929.8 million, the report showed.
In the report, September collections were $55.5 million below estimate and the state’s cumulative deficit rose to $67.8 million. September collections also fell 8.4 percent below prior year receipts and cumulative collections fell 4.9 percent below prior year receipts.
Revenue Cabinet Secretary Robert S. Kiss said energy prices continue to plague the state’s energy sector. Accordingly, West Virginia’s revenues are taking a tremendous hit, he said.
“Tax collections continue to be hurt by low energy prices and the consequences associated with the general lack of demand for natural resource products relative to their supply. We have never seen this level of erosion in severance tax revenue at this rapid pace. August numbers had us $12 million below estimate and 30 days later, we’re behind by more than $60 million. It’s unprecedented.”
Last month’s Severance Tax collections of slightly more than $24.3 million were $23.4 million below estimate and more than 23 percent below prior year receipts. Cumulative collections of $39.1 million were $43.4 million below estimate and nearly 42 percent below prior year receipts.
Coal production is trending down by roughly 15 percent, a decrease in line with original expectations. However, the decline in energy prices is much more severe in magnitude. The 12-month trailing trend for natural gas prices declined from $3.72 per Mcf as of August 2014 to just $1.99 per Mcf as of August 2015. Beginning in August 2015, the average price has decreased to less than $1 per Mcf. Average coal prices decreased from $71 per ton for the 12-month period ending as of August 2014 to $61 per ton for the 12-month period ending as of August 2015. The average price for the July-August 2015 period was just slightly above $51 per ton.
Lower incomes associated with declining energy prices also are beginning to contribute toward lower income tax and sales tax collections.
September Personal Income Tax collections of nearly $185 million were $28.1 million below estimate and 9.4 percent below prior year receipts. Cumulative collections of $440.9 million were $18.9 million below estimate and 0.4 percent below prior year receipts. Withholding tax receipts fell by 9.2 percent in September and estimated tax payments fell by 7.9 percent. Total first quarter withholding tax collections were down by 1.6 percent and estimated tax collections were down by 2.4 percent.
Other collections of note include:
· Consumer Sales Tax collections totaled nearly $101 million in September and $288.9 million for the year to date. September receipts fell $4.4 million below estimate and cumulative collections fell nearly $3.9 million below estimate. Cumulative collections were also 1.6 percent below prior year receipts. After adjustments for alterations in the timing of receipts and other factors, the overall growth rate in sales tax was no higher than 0 percent for September and 3 percent for the year to date.
· Corporate Income Tax general revenue collections totaled $34.7 million in September and $45.9 million for the year to date. In addition, another $1.075 million was transferred by statute to the West Virginia Public Port Authority in September. September collections were nearly $0.3 million below estimate and 19 percent below prior year receipts. Cumulative collections were nearly $0.9 million above estimate but more than 19 percent below prior year receipts. The decrease in tax receipts was largely attributable to the recent phase-out of the Business Franchise Tax component.
For a detailed look at West Virginia’s revenue reports, please visit www.budget.wv.gov/reportsandcharts/revenuereports