Income taxes give state coffers a boost
CHARLESTON, W.Va. -- West Virginia got a one-month reprieve from ongoing financial issues, thanks to a major surge in personal income tax payments in April, Deputy Revenue Secretary Mark Muchow said Wednesday.
"We actually got a reprieve for one month, and we can thank Congress for that," Muchow said.
He said concerns that Congress would raise taxes in 2013 led many taxpayers to claim income -- including dividends, capital gains and employee bonuses -- on their 2012 income tax returns, which were due April 15.
"If you reported extra income, you probably had to pay extra taxes," Muchow said.
That resulted in the state collecting $337.5 million in personal income taxes in April, a whopping $76.8 million above projections, and 24 percent above last April.
The spike in April collections moved growth in personal income tax collections from 1 percent to 2 percent year-to-date up to 5 percent, he said.
That also contributed to a $53.6 million surplus in general revenue collections, erasing year-to-date budget deficits.
"We'll have no problems meeting this year's budget," he said of revenue collections for the budget year that ends June 30.
Spending cuts ordered by Gov. Earl Ray Tomblin and enacted by the Legislature will produce more than $18 million in savings for the remainder of the budget year, he added.
The other major sources of tax revenue -- consumer sales taxes, corporate net income taxes and severance taxes -- all came in slightly below projections for the month, Muchow said.
Severance tax collections came in at $42.45 million for the month, about $2.5 million below estimates.
However, Muchow said there is some reason for optimism, as natural gas prices are trending higher, and with the downturn in coal production showing signs of leveling off.
"Overall, it was a good month, but it was related to one-time revenue," Muchow said.
Reach Phil Kabler at email@example.com or 304-348-1220.