Justice administration says February revenue collection miss is timing issue
CHARLESTON, W.Va. — Acting State Revenue Secretary Larry Pack says a timing issue caused the state’s revenue collections for personal income taxes in February to be way off from the number originally predicted.
Collections missed the mark in that category by some $63 million. Pack said it’s connected to last year’s tax cuts and credits passed by the legislature. He said one of those credits has to do with business partnerships and LLCs. Pack said the state thought most of those eligible for the credit would file and get their money back in November or December but most did in February which significantly impacted the numbers.
“Those refunds went out in February. In the month of December, we were over in personal income tax by $70 million but in February we are down by $60 million. It’s just a timing issue. We’re still on track,” Pack said during a Friday appearance on MetroNews “Talkline.”
Severance tax collections beat estimates by $7.4 million in February while collections for the consumer sales tax were below estimates by more than $2 million.
Overall, the state collected $283.3 million in tax revenue in February, falling below the estimate by $30.6 million. However, collections through eight months of the fiscal year are ahead of estimates by $428 million.
MORE See explanation of numbers here
Pack said the Justice administration projects revenue collections will out-distance estimates by $700 million by the end of June.
“West Virginia’s economy is strong. We now have a diverse economy so our revenues are not dependent on severance tax,” Pack said.
The state hasn’t yet felt the impact of two major employers closing their doors. Approximately 900 Cleveland Cliffs workers will lose their jobs when the tin mill in Weirton closes in early April and more than 600 workers are already out of work following the sudden shutdown last week of Allegheny Wood Products.
Some leading lawmakers have expressed concern about revenue numbers going forward. Pack said Gov. Jim Justice submitted a tight budget for next fiscal year that accounted for the $800 million in tax cuts from last year and an additional $50 million in tax cuts proposed for this year including the elimination of the remaining income taxes on Social Security.
“We are still very confident in the governor’s budget that we proposed. We are very confident in the estimates. We are very confident in the projections,” Pack said.
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