State Revenue Collections Finish Ahead Of Estimates

The state of West Virginia has finished the fiscal year ahead of projections for revenue.  

Overall, tax and revenue collections for the just-finished 2025-2026 fiscal year are 7% above projections. The state finished the year $370 million over budget. June revenue collections alone were $57 million ahead of estimate.  

“When you focus on the fundamentals and exercise fiscal discipline, we put West Virginia in a position to end the fiscal year strong as revenues continued to outpace our projections,” Gov. Patrick Morrisey said. “Because of our significant surplus, we will fund every obligation in the back of the budget, including $125 million for roads and infrastructure, fully fund the Hope Scholarship, and other important priorities.” 

Morrisey indicated the 2027-2028 budget will “aggressively fund education, foster care, infrastructure, law enforcement, and other key initiatives while providing tax relief to our citizens.” 

The biggest single source of revenue was personal income taxes. They are 7.9% above estimate. Collections exceeded estimates significantly but grew over the prior fiscal year by $52 million (2.5%), or below the rate of inflation. 

They also do not fully reflect the tax reductions passed during the most recent legislative session.  

Consumer sales tax collections were also up but in recent months, including June, they were below the rate of inflation. June was $4 million (2.5%), over estimate with total collections reaching $183 million. For FY 2026, collections are 2.2% above estimate ($41 million) and $131 million (7.2%) above the prior fiscal year.  

Severance Tax collections were $63 million in June, exceeding the estimate by $30 million. Severance Tax collections exceed their estimate by the second-largest amount for the Fiscal Year, with $534 million in actual collections against an estimate of $398 million, yielding an excess of $136 million. In addition, they have the second-largest year-over-year growth, beating the prior fiscal year by $95 million. The ongoing conflict with Iran will continue to exacerbate the volatility of the general revenue fund’s already most volatile revenue source. 

Corporate Net Income Tax collections in June were $8 million below estimate. For FY 2026, collections also ended $8 million below estimate and were $70 million less than the prior fiscal year. 

Tobacco Products Tax collections exceeded their estimate by $2 million in June but ended the fiscal year with collections below estimate by $3 million, or 2.3%. As consumption patterns shift over time away from traditional cigarette products, it is anticipated that this category will continue to decline. 

Interest Income continued to exceed estimates, with $11 million in June versus a $6 million estimate. For FY 2026, collections were $39 million, or 38.3%, above estimate but nearly $45 million below the prior fiscal year. The short-term interest rate environment has remained elevated relative to expectations, leading to higher returns on the state’s short-term investments.