State Budget Surpluses Continue To Rise

Gov. Jim Justice celebrated budget numbers for the month of April that were $319 million above estimates at a Monday press conference. That brought the budget surplus for all taxes to $1.585 billion for the year so far. 

For the 2022 fiscal year, the state had a budget surplus of $1.3 billion. Cabinet Secretary for the Department of Revenue Dave Hardy said he expects to surpass $1.7 billion in budget surpluses for the year. 

“The April general revenue numbers are the tax collections, are all the different collections that are coming into the state, have surpassed all of our wildest imaginations,” Justice said. “It’s hands down, the single largest collections, I guess in our history.”

April is typically a big revenue month with personal income tax collections and quarterly tax collections for small business. During the last legislative session, the state passed personal income tax reductions which went into effect for April.

Personal Income Tax collections totaled $192.8 million above estimates for April, which is also a new all-time record for a single month despite those reductions. Record year-to-date collections of more than $2.277 billion were $439.5 million above the official estimate and 9 percent ahead of prior year receipts.

April General Revenue Fund Severance Tax collections totaled nearly $35.6 million. Monthly collections exceeded the official estimate by nearly $17.6 million. Record year-to-date general revenue fund severance tax collections of $822.5 million were 48.1 percent ahead of last year and $622.5 million above estimate.

Hardy noted that 65 percent of those severance tax revenues are from natural gas with coal only amounting for about 35 percent. 

Consumer Sales Tax collections of $129.2 million were $18.8 million above estimate in April and 5.3 percent ahead of prior year collections. Cumulative collections of more than $1.398 billion were $189.6 million above the official estimate and 6.6 percent ahead of last year.

Corporation Net Income Tax collections totaled nearly $98 million in April. Monthly collections were nearly $65 million above estimate. Year-to-date collections of $330.8 million were $205.8 million above the official estimate and 17.8 percent ahead of prior year-to-date collections.

The surplus comes at a time when the state also faces unbudgeted financial needs in the West Virginia Department of Corrections and Rehabilitation system for infrastructure and payroll. Corrections needs approximately 1,000 more staff members. One proposal is to offer significant pay raises to make them competitive with surrounding states. That alone is expected to cost the state between $40 and $60 million. 

Similarly, staffing issues in schools statewide are often traced back to pay. A proposal to raise the pay of new teachers that failed in the most recent legislative session had a cost of $24 million.
The departments of Child Protective Services and Adult Protective Services are also severely understaffed within the Department of Health and Human Resources and libraries across the state have millions in deferred maintenance costs.