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Special $70M cash infusion helps W.Va.’s April revenue

By Phil Kabler, Staff writer

West Virginia revenue collections for April of $576.9 million exceeded projections — but only because of $70 million cash infusion from supplemental appropriations bills approved by the Legislature in special session on March 14, Department of Revenue officials said Friday.

Without the legislative action, tax collections for April would have come in $32.7 million below estimates, and down about 7 percent from April 2013, Deputy Revenue Secretary Mark Muchow said.

He said two key tax sources — income taxes and consumer sales taxes — continued to lag in April.

Income tax collections of $285.5 million were $37.5 million below estimates, hurt in part by a 6.3 percent decline in payroll withholding tax collections for the month, he said.

Sales tax collections of $90.67 million were $10.7 million below estimates. Muchow blamed the poor performance on harsh winter weather in March, since sales tax collections reflect retail sales activity from the previous month.

“I expect April sales, which will be posted in May, should show significant improvement,” he said.

Muchow said most other tax categories met or outperformed expectations, led by severance tax collections of $49.86 million, which came in $14.46 million ahead of estimates.

While cold weather hurt retail sales, it resulted in higher natural gas usage and prices — reflected in the surge of severance tax collections, Muchow said.

Tax collections on beer and tobacco products fell below estimates, as state consumption of those products is on the decline, he noted.

With two months remaining in the 2013-14 budget year, year-to-date revenue collections of $3.42 billion are $40.87 million, or 1 percent, below estimates.

Revenue Secretary Bob Kiss said Friday he hopes that, with mid-year budget cuts and hiring freezes imposed by Gov. Earl Ray Tomblin in December, the state will close the $41 million funding gap when the books are closed on June 30.

“We think we’re on track,” he said, “but it is tight.”

Kiss said it is fortunate state leaders had the foresight to set aside reserve funds, such as the Legislature’s TRAFFIC account and the Rainy Day emergency fund, allowing the Legislature to make the $70 million cash transfer in special session.

“From time to time, every state is going to face challenges like this,” Kiss said. “Since we put tools in the toolbox a few years ago, we could deal with these challenges.”

Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.


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