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West Virginia Governor Says State Hotel Occupancy is Growing

West Virginia officials say hotel occupancy has climbed from last year.

Gov. Jim Justice and other officials announced last week that statewide hotel occupancy grew around 16 percent in June from the same month in 2017. Officials say the growth produced a 20 percent revenue increase from a year earlier.

Justice announced the increase from a newly constructed luxury cabin at Chief Logan State Park last week. Justice’s office said in a news release the cabins will serve visitors to the Hatfield McCoy trail system.

Officials said every region saw increases. The news release said occupancy in the first two quarters of 2018 is up around 12 percent, producing revenue growth of nearly 15 percent.

W.Va.'s Racing Industry Fights to Survive Amid Years of Teetering State Backing

The dog and horse racing industries have played a major role in West Virginia’s economy since the mid-1930s. But in recent years, lawmakers at the statehouse have debated whether these industries fit into the state’s economic future. Those who support the racing industry are fighting to see it survive, while others say it doesn’t bring in revenue like it once did.

Nearly Ninety Years of Racing in W.Va.

Five thoroughbred horses spring from the gates in a nighttime race at the Hollywood Casino at Charles Town Races in Charles Town. Thoroughbred horse racing in West Virginia began here in 1933 when Charles Town Races first opened.

Jefferson County is also home to the oldest thoroughbred breeding farm in the state, O’Sullivan Farms. Many of the horses born and raised here go on to race at the Hollywood Casino or other racetracks around the world.

John Funkhouser is the Farm Manager and co-owner of O’Sullivan Farms. His great-grandfather founded the business in 1939, and eventually passed it on to John’s grandparents.

“At the end of the 40s, early 50s, my grandmother came out to the farm where we are now, and she bought this farm with her own money,” Funkhouser said.

John Funkhouser tends to a young foal with its mother.

Today, John, his brother Joe, and their parents keep the place going along with the help of six to twelve employees.

The Funkhousers have seen hundreds of horses go in and out of their gates over the past eight decades. And several of their horses have been champion racers. One made it into third place in one of the Triple Crown races— the Preakness Stakes— in 1939.

One of the eight stallions at O’Sullivan Farms.

Today, they have eight stallions, 42 broodmares, 46 yearlings and foals, and nearly 150 acres of farmland. About one of every four horses living on the farm belongs to clients from all over the country.

“There’s so much beauty in raising these horses,” Funkhouser said. “When you finally get that horse that you’ve been raising and breeding for five years, and it does well, [it’s] not much more gratifying than that.”

But it’s a tough industry, and it’s expensive.

Funding a Pricey Industry

A horsemen family like the Funkhousers rely heavily on state funding to keep their operation going. State funds pay for things like feeding and caring for the horses, helping pay bet winnings, paying jockeys and other staff.

A mare with her foal at O’Sullivan Farms.

The state’s racing industry is supported in a variety of ways, but the West Virginia Legislature supports the industry mainly through three accounts—the Greyhound Breeding Development Fund, the Thoroughbred Development Fund, and the Purse Fund.

The Purse Fund is the biggest. Each year, a certain portion of tax dollars and casino revenue goes into this fund. The cash mostly comes from video lottery, table games, and betting at the state’s four casinos.

But the Purse Fund has dropped over the years—from about $75 million four or five years ago to about $40 million in 2018.

The Greyhound and Thoroughbred Development Funds have both received between $1 million and $2 million less over the past four years.

These three accounts are directly linked to how well a casino performs each year.

And given the decline in casino revenue, some lawmakers question the remaining investment in the racing industries. But those who support the industry argue horse and dog races at the state’s casinos are key to keeping those casinos competitive with surrounding states.

Support or Opposition from the State of W.Va.

The Funkhousers and others in the racing industry constantly worry that funding from the state will continue to dwindle.

“Every year, for the last eight years, we’ve gotten less and less money from what we’ve been promised,” Funkhouser said. “But because you’ve got a legislature that doesn’t fully understand the industry, they’ve taken a successful industry that was hugely successful seven or eight years ago, and now it’s on the brink of collapsing.”

The 2017 state Legislative session was a tough budget year, with a $450 million shortfall. In that year, budget allocations for several industries, including the Greyhound Breeding Development Fund, were almost eliminated. There were concerns the same thing might be considered for the Thoroughbred Development Fund.

During the 2018 regular session though, continued funding for the state’s two racing industries was not in jeopardy. There was even a bill to help them get more money. That bill passed unanimously in the state Senate, but didn’t make it out of the House Finance Committee.

Jefferson County Delegate Riley Moore is passionate about the horse racing industry in his region, and he hopes to see state support for the racing industries restored back to a more competitive place.

He argues the industry is good for West Virginia—that it supports green space, tourism, and boosts the economy.

“As important as the coal industry is to other parts of the state, that is the level of importance the horse racing industry, the thoroughbred industry, is for Jefferson County in the Eastern Panhandle at large,” Moore said. “That is our coal industry here. That is the long term industry that is one of our biggest employers here. So it’s certainly huge for the area and for the state of West Virginia.”

Thoroughbred horses spring from the gates in a race at the Hollywood Casino in Charles Town, W.Va.

But other lawmakers think it’s a bad investment because it doesn’t bring in enough revenue for the entire state like it did in previous decades.

Delegate Eric Nelson, the House Finance Chairman, said he’s sympathetic to the struggle of the racing industry, but has concerns the industry is declining and fewer people are attending races.

So, in tough budget years, he said state funding can’t always be guaranteed. “It’s a big balancing act,” Nelson noted. “[The racing industry] means more to some of those districts that actually see the full component of that, but then there are many other areas of state that don’t get the full benefit or see the full benefit of that, and there’s concerns about the priorities of dollars and where they should go.”

The Racing Industry’s Impact

An economic impact study done by West Virginia University in 2012 indicates that declines in attendance has affected the amount of cash going into the funds, impacting the level of state revenue accrued each year.

The report found that the industry brings in roughly $4.5 million in total state tax revenue annually.

A foal with its mother at O’Sullivan Farms.

Charles Town Races accounts for nearly 50 percent of the total business impact from the state’s racing industries. Mountaineer Park in Hancock County accounts for 30 percent, and the two greyhound tracks, Mardi Gras in Cross Lanes and Wheeling Island in Wheeling, together contribute about 10 percent of total business volume impact.

The 2012 study also indicates the thoroughbred and greyhound racing industries in West Virginia contribute more than $320 million in total business volume to the state’s economy.

That’s 7,300 jobs, which is about 10 percent of employment in West Virginia’s leisure and hospitality sector.

A more recent economic impact study on the state’s racing industry has not been conducted.

State Officials: 2018 Budget Year to End in Surplus

Gov. Jim Justice and his revenue staff say West Virginia is heading toward a budget surplus as the state nears the end of the 2018 fiscal year.

The governor and his revenue staff announced May’s revenue collections were more than $20 million above estimates. The entire month saw nearly $330 million in total revenue collection.

Several key collections came in above estimates, including personal income tax by $8.5 million, severance tax collections by nearly $4 million, and consumer sales tax by nearly $1 million.

General Revenue Fund collections remained on target in May, and Cumulative State Road Fund collections were $12.5 million above estimates.

Justice says the state is headed toward a budget surplus at the end of the month, and fiscal year 2019 looks promising.

Deputy Secretary Mark Muchow says a big reason for the increase in revenue is an increase in employment across the state of 9400 jobs since this time last year.

Gov. Justice: W.Va. Headed for Strong Fiscal Year Finish

West Virginia tax revenue for the month of April were above estimates, putting the state on track to reach projections by the end of the fiscal year in June, according to Governor Jim Justice.

Justice said during a news conference that revenue collections for April were $23.7 million above estimates.

“It was greatly because of personal income taxes and wage and salary withholdings, which are indicators of a strong and vibrant economy and good things going on,” Justice said.

Collections for the current fiscal year now stand at almost $3.4 billion — or 99.9 percent of year-to-date estimates and 4.4 percent above the last fiscal year.

Justice also says bond rating agency Fitch Ratings told officials it recently revised the state’s outlook from “negative” to “stable.”

W.Va. Revenue Continues to Be Ahead of Estimates

For the first time in five years, West Virginia revenue collections are reported to be above estimates at the fiscal year halfway mark.

State revenue officials say West Virginia’s overall cumulative collections in the General Revenue Fund are over $100 million ahead of where the state was this time last year. And the state is above estimates at the fiscal year halfway mark for the first time since December 2012.

State Revenue Secretary Dave Hardy said numbers in the last three months have been encouraging, and he’s “cautiously optimistic” the trend will continue upward.

The General Revenue Fund went up nearly $370 million in December – that’s almost 12 percent higher than last year. Personal Income Tax exceeded estimates by $21.5 million.

December did see some shortfalls in Consumer Sales and Use tax, Severance, B&O, and tobacco taxes. State Road Fund collections for last month were nearly $45 million and 15 percent higher than December 2016.

Hardy said he anticipates there will be an uptick in severance tax in the upcoming winter months due to the high volume of heat use in homes.

Editor’s Note: Headline was revised for clarity.

West Virginia Monthly Tax Receipts Up Again from Last Year

West Virginia tax officials say collections of nearly $949 million so far this fiscal year are 3.7 percent or almost $34 million higher than the same period last year.

Treasury Secretary Dave Hardy says revenues from September alone were up 3.5 percent mainly due to increases in corporate net income tax as well as severance tax receipts from coal mining and natural gas drilling.

He says the first-quarter results show “things are materially better than they were last year.”

The Department of Revenue reports severance taxes from production of coal, natural gas and oil are up 19 percent for the month and 47 percent for the quarter from a year earlier.

Hardy says that trend is expected to continue upward due to improving natural gas and higher coal sales.