CHARLESTON — West Virginia maintained a 13-month streak with general revenue fund tax collections in July beating estimates, though the state’s Rainy Day Fund was down 5% in value from this time last year.
According to the Senate State Finance Committee, July tax collections for the new fiscal year 2023 were $381.1 million, beating the Department of Revenue’s estimate of $288.7 million by 32%. of the state and giving the state $92.4 million in excess revenue.
“It feels like a broken record…this thing isn’t slowing down,” Justice said Tuesday morning during a virtual briefing with reporters from the State Capitol Building. “I told you over and over again that I was going to take you on a rocket ride, and there you are, brother. It’s okay, and we’re not going to slow down until we turn over every stone and try to help everyone we possibly can.
More than 55% of the total tax revenue collected in July came from the severance tax on coal and natural gas. July severance tax revenue of $54.6 million significantly exceeded the $3 million revenue estimate for the month and topped the $3.4 million in recoveries at the same period last year.
According to the US Energy Information Administration, the price of a short ton of Central Appalachian coal rose from $168 on July 1 to $177 on Friday, with the price of a short ton of Northern Appalachian coal rising from $141 in early July to 143 dollars by the end of the month.
According to the most recent data from the EIA, natural gas export prices by pipeline rose from $4.62 per thousand cubic feet in December to $7.62 per thousand cubic feet in May, while that liquefied natural gas exports fell from $9.62 per thousand cubic feet in December to $12.33 per thousand cubic feet. cubic feet in May.
The justice, however, warned that coal and natural gas prices will not always remain high and have in fact fallen over the past year. He said it was important to manage the state budget responsibly to avoid dependence on excess start-up taxes.
“For those who believe with just blinkers that we are going to have these surpluses forever and ever, they are making a big mistake,” he added. Justice said, whose family owns major coal mining operations. “It’s a high-risk bet.”
Personal income tax is the second most collected revenue in July. Collections for the month were $161.2 million, or 9.7% higher than the estimate of $147 million, or $14.4 million. July tax receipts were also 13.7% higher than the $141.8 million collected 12 months ago.
Personal income tax, which brought in 43% of the total $5.9 billion collected during the 2022 tax tear that ended June 30, was the subject of a special session which began last week to cut tax rates by 10% combined across all six income brackets. . This bill was passed by the House of Delegates but was never taken up by the Senate.
In other collection categories, consumer sales and use tax brought in $96.3 million in July, 12.2% higher than the $85.8 million estimate, which resulted in a surplus of $10.4 million. Net corporate income tax brought in $14.4 million in July, above the estimate of $4 million for a surplus of $10.4 million.
While tax collections were good, the state fund to handle tough economic times was down slightly. The state’s two revenue deficit funds, also called the Rainy Day Fund, totaled $887.3 million at the end of July, down 5% from $932.6 million at the same time last year. . The Rainy Day Fund hit $1.033 billion in January but lost money due to a volatile stock market hurt by high inflation and recession fears.
Until this year, the state was required by law to contribute half of each year-end surplus to the Rainy Day Fund. The state ended fiscal 2022 with a record $1.3 billion. But the Legislature passed a bill earlier this year capping the Rainy Day fund, so the state no longer has to put half of any excess into Rainy Day, except when levels fall below 13% the total general revenue allocation for the previous year.
“Whether it’s the Rainy Day Fund with a few flags going up, or a metallurgical coal severance tax drop with big flags going up.. we have to with everything in us to absolutely pay attention to the store and pay attention to the store in a good way,” said the court. “That’s what I’m here to do.”