CHARLESTON, West Virginia — The April 15 deadline for income tax returns helped erase West Virginia's general revenue deficit for the budget year, though state officials remain pessimistic about collections for the year's remaining two months.
State government had expected $511 million from general taxes in April and instead reaped nearly $565 million. That closed a $49 million year-to-date gap, leaving revenues $4.6 million ahead for the budget year that ends June 30.
Deputy Revenue Secretary Mark Muchow cites late 2012 uncertainty over how Congress would decide tax policies. This nervousness prompted property sales for capital gains, higher than expected dividends and salary bonuses, and other steps that boosted incomes and the taxes owed on them, Muchow said Wednesday.
Other key revenue sources were flat or fell below their April estimates. Sales taxes were expected to bring in $103.4 million but missed that mark by $2.7 million. Taxes on corporate net income and business equity were off by a third, totaling $31.4 million.
Severance taxes on coal, natural gas and other extracted resources were projected to bring in $45 million and were $2.5 million short. But Muchow said West Virginia's energy sector has begun holding steady after months of weak revenues from declining coal production and natural gas prices.
Muchow expects below-estimate collections in both May and June, but also believes the state will avoid a budget deficit. At Gov. Earl Ray Tomblin's request, the Legislature cut $28 million from current spending during its recent session. A special reserve fund, meanwhile, will ensure enough money for income tax refunds, Muchow said.
"Those are tools used to make sure the revenues at the end of the year are balanced with the expenditures," Muchow said. "Any doubt about that was eliminated by the April numbers."