State Deputy Revenue Secretary Mark
Muchow said October collections were off by $8.1 million and so far this fiscal
year the state has brought in $42.5 million less in tax revenue than it thought
it would.
Muchow said personal income tax
continues to be the weakest area. It missed estimates by almost $8 million
last month and is down more than $35 million since July.
Muchow said those with jobs aren’t
seeing an increase in their wages.
“And until we see some improvement
in wage and salary growth we’re going to see a continued pattern of very
sluggish growth in withholding taxes,” he said.
The strongest performing tax so far
this budget year has been the severance tax—because of natural gas not coal.
“It was the weakest tax last year
and this year so far it’s our strongest tax,” he said.
Severance tax revenues are up by 10
percent from last year’s numbers.
Muchow said there is cause for
concern when looking at the overall revenue collection picture.
“We will need some improvement in
both economic activity as well as tax revenue growth in order to balance the
picture by the end of the year,” he said. “The growth rate that we now need for
the rest of the year is about 3-point-6 percent. If this was a normal year in West Virginia
Unfortunately, Muchow said, this
isn’t shaping up to be a regular year for revenue collections.
Gov. Earl Ray Tomblin is already looking at a second straight
year of 7.5 percent budget cuts for most state agencies.
