CHARLESTON — December proved to be a merry month for state tax collections, topping monthly revenue estimates by $6.9 million — largely thanks to timing issues that carried taxes due in November into December.
For the month, the state collected a total of $428.2 million, exceeding the estimate of $421.35 million.
That was primarily because taxes due at the end of November could not be remitted to the state until December, since state offices were closed for the final three days of the month.
During December legislative interim meetings, Revenue Secretary Dave Hardy told legislators to expect a rebound after a weak November, noting that $11 million of payments had come in on the first two workdays of the month.
“We had two very strong collection days Monday and Tuesday,” Hardy said at the time.
With the revenue surplus for December, the state’s year-to-date budget deficit shrank to $33.4 million, with total year-to-date tax collections of $2.203 billion down 1.4% from the same point in 2018.
Anticipating fiscal improvement in December, Gov. Jim Justice announced last month that a proposed $100 million of mid-year state spending cuts would not be necessary.
In a statement Monday, Justice said, “Our state is still in great financial health and we’re doing well in lots of areas. That said, we are always looking at all of our numbers every single day because we know that even though we’ve done so much, there are always areas where we can continue to improve.”
December tax collections finished in the black even though the two main pillars of state revenue — personal income taxes and consumer sales taxes — missed estimates for the month.
Income tax collections of $174.8 million were $3.18 million below estimates and down 3.2% from December 2018.
Sales tax collections of $127.3 million were $1.2 million short of estimates and down 1.1% from December 2018.
Likewise, corporate net tax collections of $30.4 million were $2.6 million below estimates and 2.6% below December 2018 collections. Severance taxes had a rare positive month in December, again primarily because of timing issues, with $43 million of collections exceeding estimates by nearly $200,000.
However, year-to-date severance tax collections of $136.1 million are $37.8 million below estimates and down 35% from the same point in 2018. That’s the result of a global oversupply of natural gas, which has caused prices to plunge, resulting in a sharp downturn in demand and pricing for coal.
Business and Occupation taxes — paid primarily by electric utilities — pulled December tax collections into the black, with December collections of $17.6 million topping estimates by $13.4 million and coming in 121% higher than in December 2018.
As the Governor’s Office noted, that was the result of a “large carryover of deposits due at the end of November.”
The release of the revenue report by the Governor’s Office broke a trend. Since June, the Senate Finance Committee had been preemptively releasing the revenue numbers ahead of the Justice administration as part of an apparent ongoing feud between Justice and Senate leadership.