CHARLESTON, W.Va. -- Some media outlets last week were all in a dither about November state revenue collections coming up $14.9 million short for the month, and that the year-to-date revenue shortfall had jumped some 25 percent, from $42.5 million to $57.4 million, in a single month.
There was much ado and speculation about budget freezes, state employee layoffs or furloughs, etc., as a result of the seemingly dire downturn in state finances.
However, the November shortfall is essentially an accounting fluke.
Of the 14 different categories of taxes the state collects, most come due on the 15th or the 20th of the month. Only two taxes still come due on the last day of the month: severance taxes, mainly from coal and natural gas production; and business and occupation taxes, primarily from power plants operating in the state.
In November, not only did the last day of the month fall on a Saturday, but state offices were also closed that Thursday and Friday for the Thanksgiving holiday.
That meant, on paper, severance taxes came in $14.3 million short for November, and B&O taxes were down $2.7 million.
(A household analogy would be if you forgot to deposit your weekly paycheck over the Thanksgiving holidays, and then sat down to balance your checkbook at the first of the month, your first impression would be that it's going to be slim pickings for Christmas ... until you remembered to cash your paycheck.)
Indeed, on Monday and Tuesday, nearly $28 million of severance taxes poured into state Tax Division offices.
Had those taxes been booked to November, the media coverage would have been very different, about how the state had met monthly revenue projections for the first time in the 2013-14 budget year, and how the year-to-date revenue shortfall remained basically unchanged from October.
Indeed, personal income tax collections -- which are a pretty accurate gauge of the economy -- came closer to meeting monthly projections in November, coming in $1.8 million below estimates, after running $7.8 million short in October.
Deputy Revenue Secretary Mark Muchow said that's the result of the state beginning to see an uptick in payroll and employment numbers.
While a $42 million revenue shortfall is nothing to sneeze at, and may well require spending adjustments if the economy doesn't continue to improve over the next few months, it's important to keep in mind it's only about 1 percent of the total state general revenue budget.
And for the Chicken Littles of the media, a remedial accounting course might be in order.