Apr 4, 2023
CHARLESTON — With just three months left in the current fiscal year, West Virginia is already sitting on just short of $1.3 billion in surplus tax revenue.
According to the monthly report released by the Senate Finance Committee Monday, the state collected $4.601 billion for the general revenue budget as of the end of March for the first three-quarters of fiscal year 2023 ending on June 30. That was 37.96% more than the $3.335 billion estimate from the Department of Revenue, leaving the state with $1.266 billion in excess revenue.
The state is expected to end the fiscal year with more than $1.764 billion in surplus tax revenue, more than enough to cover the $1.165 billion worth of spending placed in the back of House Bill 2024, the budget bill setting the budget for fiscal year 2024 beginning July 1. Surplus tax dollars at the end of the current fiscal year would be used to fund items placed in the surplus section of next fiscal year’s budget.
Tax collections for the month of March alone were $517.8 million, which was 44.31% more than the $358.8 million revenue estimate, resulting in a 159 million surplus for the month. All of the four major drivers of tax revenue for the general revenue budget were up, contributing to the March and year-to-date surpluses.
“This March we certainly have a lot to be thankful for,” Justice said in a statement Monday. “Our revenue collections are strong, our state is in an excellent financial position, and we’ve now got the largest tax cut in state history on the books. So as Spring begins across the Mountain State, I’m extremely proud of our state’s financial health, but most of all I’m proud that all hardworking West Virginians have more money in their pockets.”
Personal income tax collections for March were $200.3 million, which was 31.65% more than the $152.1 million revenue estimate for a $48.1 million surplus. Year-to-date personal income tax collections of $1.805 billion was 15.83% more than the revenue estimate, giving the state a $246.7 million surplus.
West Virginia just recently cut personal income tax rates by 21.25% with the passage of House Bill 2526, signed into law by Gov. Jim Justice on March 7. The tax cut is retroactive to Jan. 1 with guidance sent out to employers on the new tax tables from the state Tax Division on March 16, though the effects of the tax cuts on personal income tax revenue won’t likely be seen until the end of April.
Severance tax collections for coal, oil, and natural gas also continue to outperform expectations. March severance tax collections of $84.8 million were 311% more than the $20.6 million revenue estimate, providing $64.2 million in surplus. Year-to-date severance tax collections of $787 million were 332% more than the $182 million revenue estimate. The year-to-date severance tax surplus of $605 million represents nearly 48% of the total general revenue surplus collected year-to-date.
In other tax collections, March consumer sales and use tax collections of $139.7 million were 19.17% more than the $117.3 million estimate for a $22.5 million surplus for the month. Year-to-date sales tax collections of $1.269 billion were 15.55% more than the $1.098 billion estimate for a $170.8 million surplus.
And March corporate net income tax collections of $18.5 million 515% more than the $3 million estimate for a $15.5 million surplus for the month. Year-to-date corporate net income tax collections of $232.9 million was 153% more than the $92 million estimate for a $140.9 million surplus.
Steven Allen Adams can be reached at sadams@newsandsentinel.com.
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