WV Budget Projects Overblown - WOWK 13 Charleston, Huntington WV News, Weather, Sports

WV Budget Projects Overblown

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CHARLESTON- Wednesday , the Governor’s office reported final General Revenue Fund collection numbers for Fiscal Year 2017 were $120.7 million below original estimates. Several gap-filling measures, including taking $40.4 million from the Rainy Day Fund, effectively closed the revenue shortfall for the year.

The Governor’s chief of staff, Nick Casey, highlighted that the Legislature presumed there would be $11 million in surplus from FY17 to be used in the Fiscal Year 2018 which began on July 1.  There was no such surplus but this $11 million in fake money was inserted in the state budget by the Legislature. Casey noted that the $11 million in hocus pocus money has to be made up from cost cuts somewhere such as fall trout stockings, volunteer firefighters, DHHR or fairs and festivals.

“Thank goodness that Governor Justice accurately predicted that West Virginia’s severance tax revenue would continue to increase," said Nick Casey, the Governor's chief of staff. “Coal and gas severance taxes are the only real bright spots and have been up in March, April, May and June. Increase in severance tax is coming to pass just like the Governor said it would in his State of the State address.”

"the people of West Virginia are getting hurt unnecessarily due to the cuts the Legislature made in the Governor’s proposed budget. The taxpayers must know that their lawmakers could’ve stopped this pain but they turned their backs on the Governor’s budget. West Virginia is only on the move because of the Governor’s road bills and his vision on severance tax even though he has had to drag a do-nothing Legislature along for the ride," Casey added.

The anticipated revenue gap for FY17 was originally projected to be as high as $192.2 million, but the combination of one-time special revenues along with mid-year budget reductions of nearly $60 million closed that gap and a raid on the rainy day fund and the increases in severance tax the Governor predicted not only filled the gap but resulted in a year end surplus of roughly $63.2 million.  The final number will be known at the end of July when the accounting books close for state agencies.

Half of the year-end surplus will be transferred to the Rainy Day Fund and the remaining half will be available for appropriation in FY18.  The FY18 General Revenue Fund Budget is dependent on more than $41 million of available net surplus funds at the end of FY17 but that number will be roughly $11 million short.

June General Revenue Fund collections of nearly $424.7 million were $18.7 million below estimate but 6.6 percent ahead of prior year receipts.

Highlights of the major revenue components accounting for nearly all revenue collections include:

  • June General Revenue Fund Personal Income Tax collections fell short of estimate by $31.9 million.
     
  • Consumer Sales and Use Tax receipts, after a 6.2 percent boost in May, rose 5.7 percent above last June. Collections also exceeded the monthly estimate by $3.7 million. Cumulative adjusted collections were up from prior year receipts by just 0.1 percent with recent gains offset by significant declines occurring in the months of July (June sales) and January (December sales). The FY17 deficit in General Revenue Fund sales tax collections was $62.7 million with nearly 80 percent of the shortfall attributable to July and January collections.
     
  • General Revenue Fund Severance Tax collections totaled more than $321.0 million in FY17, an amount that was $58.5 million above estimate and 16 percent higher than prior year receipts. June General Revenue Fund Severance tax collections of $47 million were nearly $18.9 million above estimate. As of May, total state and local severance tax collections for the fiscal year-to-date were up more than 20 percent from last year. Coal severance tax receipts were up 6.9 percent to $209.6 million. Natural gas severance tax receipts were up 59 percent to $97.6 million and oil severance tax receipts were up nearly 48 percent to $12.6 million.
     
  • Tobacco Product Excise Tax collections totaled $194.6 million for the year. Collections were $1.6 million below estimate and 94 percent above prior year receipts. The revenue gain from prior year was attributable to an increase in tobacco tax rates including an increase in the cigarette excise tax rate from 55 cents per pack to $1.20 per pack, an increase in the other tobacco products tax rate from 7 percent of wholesale price to 12 percent of wholesale price and the imposition of tax on e-cigarette liquids. June collections of $16.9 million were more than $0.9 million above estimate.
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