The West Virginia Department of Revenue today released numbers for the month of June, officially ending a fiscal year with a balanced budget.
General Revenue Fund collections for June totaled $461.5 million and Fiscal Year 2016 collections totaled nearly $4.103 billion. Monthly collections were $12.4 million below estimate and cumulative collections were nearly $203.1 million below estimate for the year. However, the state ended the fiscal year with a relatively small surplus (before expirations) of $0.9 million.
Budget balance was achieved through a combination of mid-year budget cuts ($137.8 million), the reallocation of certain expenditures to other funding sources ($53.9 million), the use of other available fund balances ($12.3 million) and the use of various gap fill revenues ($223.0 million). In the end, $98.6 million was used from the state’s Rainy Day Fund to balance the budget.
Absent extraordinary measures by both Governor Tomblin and the Legislature to close a significant budget gap, net General Fund revenues decreased by 7.5 percent or nearly $317 million below prior year receipts and fell short of original estimates by 9.9 percent or more than $426 million. Total unadjusted net collections of $3.88 billion were more than 1 percent below actual collections received eight years ago in Fiscal Year 2008.
“Due to unprecedented challenges in the energy markets, this was one of the most challenging budget years I have dealt with in my 42 years of public service,” Gov. Tomblin said. “By making reasonable cuts and using some one-time money, we were able to finish the year with a balanced budget while also maintaining important payments on our long-term liabilities.”
Revenue Secretary Robert S. Kiss also attributed the shortfall to the unprecedented plummet in energy prices for both natural gas and coal, as well as the domino effect their downward spiral had on related businesses throughout the Mountain State.
“Every energy state in the nation is struggling with the same kind of challenges that face West Virginia. Even back in the 1980s, we didn’t see anything like what we saw last year,” Kiss said. “With Governor Tomblin’s leadership, we’ve stayed focused on a strong, fiscally responsible plan through
a challenging budgeting process.”
General Revenue Fund collections for the month of June totaled $461.5 million, which was $12.4 million below estimates and 5.1 percent ahead of prior year receipts. Highlights from General Revenue Fund collections for the completed fiscal year:
Personal Income Tax – June Personal Income Tax collections of nearly $169 million were 13 percent below prior year receipts largely due to an 18.5 percent decline in withholding tax receipts following a 6.8 percent increase in the prior month. Fiscal Year 2016 receipts of more than $1.8 billion were $57.2 million below estimate. Adjusted cumulative collections were also 4.9 percent below prior year receipts. Total receipts included $53 million in revenues previously dedicated to the Old Workers’ Compensation Debt Fund. Personal Income tax collections fell due to a combination of lower business profits, royalties and wage and salary income associated with the declining energy sector.
Severance tax collections of slightly more than $40 million fell $28.2 million short of estimate in June. Fiscal Year 2016 collections of $276.4 million were $195.3 million below estimate and nearly 43 percent below prior year receipts following adjustment for the nearly $39 million in receipts from diverted special fund tax receipts. Lower energy prices and lower coal sales drove the results. Coal severance tax collections fell by more than 30 percent during the year and natural gas tax collections fell by nearly 62 percent despite an 8 percent increase in unit gas sales.
June Consumer Sales Tax collections of more than $125.4 million were more than $7 million below estimate but 3.4 percent ahead of prior year receipts. Cumulative collections of more than $1.23 billion were $38.8 million below estimate and largely unchanged from prior year collections.
Corporation Net Income Tax collections fell short of estimate by $8.9 million in June. Fiscal year 2016 collections of $143.6 million were $29.6 million below estimate and 24 percent below prior year receipts. For a detailed look at West Virginia’s revenue reports, please visit www.budget.wv.gov/reportsandcharts/revenuereports.
