While some may try to criticize Governor Jim Justice and his administration’s handling of the COVID-19 pandemic, it is difficult to criticize the mountain state’s financial performance during the first quarter of 2020.
It’s true that federal CARES Act funding and other grants have provided West Virginia with initial stability money, but it’s hard to imagine it being managed better than it has been.
Government Secretary of Justice and Revenue David Hardy painted a rosy picture of the state’s financial picture on Thursday – and who can blame them?
The numbers speak for themselves, as the administration of justice shared the following data:
– General Revenue Fund collections of $ 423.6 million for September were approximately $ 10 million above estimates.
Year-to-date earnings of $ 1.239 billion were nearly $ 90.4 million above estimates and 12.8% above previous year’s revenue.
– Total collections were $ 140.9 million more than the previous year’s revenue.
– Consumer sales tax collections increased 2.8% in August, as monthly collections of $ 129.3 million were $ 0.8 million above the estimate. Record first quarter receipts of $ 350.7 million were $ 15.2 million above estimate and 6.2% above prior year’s revenue.
– Personal income tax collections reached $ 194 million in September. Cumulative personal income tax collections were $ 22.4 million above the estimate and 22 percent from last year.
– Corporate net income tax collections amounted to nearly $ 38.4 million in September. Collections were $ 11.4 million above estimates. Cumulative collections reached nearly $ 105.8 million, up from $ 50.2 million the previous year. Year-to-date revenue was $ 43.3 million above the estimate.
– As of the end of September, the General Revenue Fund’s cash flow was $ 297.8 million, the best end-of-first-quarter cash flow since fiscal year 2009. For comparison purposes, the cash flow as of the end of September 2019 was $ 120.1 million.
Again, the state coffers at the beginning of the 2020-21 fiscal year undoubtedly benefit from the tax deadline incurred up to July 15.
But that doesn’t explain the rise in consumer sales tax collection, which speaks volumes about the confidence residents have in the economy.
Similarly, the increase in severance tax collection, as well as other economic indicators, show a state whose finances are stable.
“One indicator I like to look closely at is our consumer sales tax and our consumer sales tax was an all-time high for the state of West Virginia in the first quarter,” said Gov. Justice. “In addition to that, we have set an all-time first quarter record for the collection of personal income taxes.”
Hardy said that while the state had a great September, the quarter’s performance offers a clearer picture of the state’s upward trajectory in terms of economic stability.
“We had a great September. We’re always happy when we get over budget, “Hardy said.” But that’s not the whole story here today.
“We often say in the revenue department that we get four major voting papers a year and they come at the end of each calendar quarter.
“Ninety days is a great time to take a look at your numbers and try to get an idea of how we are doing, not just in a specific month, because the months can vary due to cyclical things, but quarters are generally much better estimate of how we are doing. And we are very, very happy.
Hardy isn’t alone in giving the state high marks in terms of tax benefits.
He and Justice said bond rating agencies also gave the state high ratings, including Moody’s and Fitch who reaffirmed the state’s bond ratings.
Standard and Poor’s praised the state’s budget performance for its anticipation of fiscal pressures, robust fiscal management policies, and the ability to review spending and revenue adjustments as needed, Hardy said.
“This is Standard and Poor’s giving these compliments on what the West Virginia financial picture looks like and how we, as a team, under the governor’s leadership, manage the state’s finances,” Hardy said. “We couldn’t be happier at the State Department of Revenue for Finance today.”
We applaud the government of justice, Hardy and the administration, as well as the legislature, for implementing sound fiscal policy and thus following the uncertainty of COVID-19.
Although the pandemic is far from over, it is clear that the state has an action plan for success in the future. We encourage state leaders to continue with the implementation because, quite simply, it works.