CHARLESTON, W.Va. -- State tax revenues may miss their mark for the budget year following a poor showing in January, just as Gov. Earl Ray Tomblin prepares to lay out a new spending plan to the Legislature, a senior revenue official said Friday.
Collections were projected to exceed $406 million last month, but instead totaled $394.5 million. That more than erased a slight gain reached in December, and caused revenue to lag by $7.9 million since the budget year began July 1.
While the shortfall is less than 1 percent of the $2.3 billion to-date estimate, Deputy Revenue Secretary Mark Muchow said that trend may continue.
"We're treading water, and we've been treading water all fiscal year," Muchow said Friday. "The seas are pretty rough out there. I don't expect any surplus to speak of. There's a chance we'll end up below the estimate somewhat."
A weak energy sector, particularly regarding coal, remains a drag on the state's economy and resulting tax revenue. Just as strong coal prices and demand proved vital to the state budget during and after the recession, from 2009 through 2011, the drop in production is reflected in the current collection figures, Muchow said.
West Virginia taxes coal and other natural resources as they are extracted from the ground. This severance tax was supposed to bring in $36 million in January, but fell $9.5 million short. Severance tax collections are down $28.8 million below their year-to-date estimate, and are behind 17.5 percent when compared to this point during the 2011-12 budget year.
"The best news so far is that it's 10 to 15 degrees outside," Muchow said. "A cold February can only help energy prices."