State Finishes Fiscal Year With $175M Unappropriated Surplus

West Virginia finished the 2026 fiscal year with a total surplus of nearly $460 million. As often happens at the end of the legislative session, money is allocated to what is referred to as the “back of the budget.” These are projects that will be paid for using any excess revenue for the year.  

Among those surplus appropriations were $125 million in funding for highways, $60 million to fully fund the Hope Scholarship program, $20 million for Medicaid, $17 million for seniors, $10 million for the reclamation of abandoned and dilapidated properties and $5 million for flood resiliency.  

After all those appropriations were addressed, the state still has approximately $175 million that has not been spoken for, according to a report from the West Virginia Department of Revenue.  

West Virginia’s total General Revenue Fund (GRF) collections for July were $388 million, exceeding estimates by $11 million, or 3.0%. Year-over-year, total GRF collections increased by nearly $1 million, or 0.2%, compared to July 2025. 

“These results demonstrate that West Virginia is on solid financial footing because we’ve remained disciplined with taxpayer dollars,” Gov. Patrick Morrisey said. “July collections exceeded estimates, and with the books now closed on Fiscal Year 2026, we’re well positioned to carry out the budget enacted for Fiscal Year 2027.” 

Personal Income Tax collections, the largest individual GRF component, were $158 million in July, exceeding the monthly estimate by $11 million, or 7.5%. Compared to last July, Personal Income Tax collections are up by $10 million, or 6.8%. Personal Income Tax collections are likely to slow as the full effects of the governor’s initiative to lower personal income tax rates by 5% fully implements. 

Consumer Sales Tax collections exceeded the monthly estimate by $11 million (7.9%), with total collections for June reaching $150 million. Collections are $13 million (10.1%) above last July. 

Severance Tax collections were negative $4 million in July, falling below the estimate by $13 million. The cause of negative Severance Tax collections is a combination of local coal distributions to counties and municipalities which occur each July as well as the final payment on an infrastructure bond issuance pledged using the first Severance Tax collections each fiscal year. This final payment exceeded $22 million. 

Corporate Net Income Tax collections in July were $2 million below estimate (10.8%) and $8 million below last July (35.2%). 

Tobacco Products Tax collections exceeded their estimate by less than $1 million in July but are nearly $2 million below the prior July. As consumption patterns shift over time away from traditional cigarette products, it is anticipated that this category will continue to decline. 

Interest Income continues to exceed estimates, with $10 million in July, exceeding estimates by 17.9%. The short-term interest rate environment has remained elevated relative to expectations, leading to higher returns on the state’s short-term investments.