West Virginia finished the 2007-08 budget year Monday with a record $3.928 billion in tax collections, up 4.7 percent from the 2006-07 budget year, according to deputy revenue secretary Mark Muchow.

Much of that increase was driven by high energy prices, with severance tax collections (primarily from sales of coal and natural gas) up 12.6 percent, to $338.2 million, he said.

Meanwhile, the Rockefeller Institute of Government released a State Revenue Report on Tuesday showing West Virginia as one of only four states with tax collections up 10 percent or more from January through March, compared to the same quarter in 2007.

Overall, state tax collections came in a total of $109.2 million over projections for the budget year, Muchow said.

However, he noted that - with one exception - most of the upswing in major tax sources came in the first nine months of the budget year, which began last July 1, with downturns in the past three months.

For instance, corporate net/business franchise taxes came in at $338 million, up 8.6 percent compared to 2006-07.

However, those collections were up for the first nine months of the budget year, but fell below 2007 levels in April, May and June, he said.

"Corporations are suffering from higher energy costs, just like individuals," Muchow said Tuesday.

Likewise, personal income taxes brought in $1.519 billion in 2007-08, up 7.6 percent, but much of that increase was in stock market-driven capital gains in 2007 - something Muchow said the state can't depend on in 2008.

"The stock market is down 14 to 15 percent year-to-date," he said.

Another sign for concern: Consumer sales tax collections came in $47.5 million below estimates for the budget year, and down 0.5 percent from 2006-07 collections.

Muchow said the only major tax source that has seen a strong upswing in the past months is the severance tax.

West Virginia finished the 2007-08 budget year Monday with a record $3.928 billion in tax collections, up 4.7 percent from the 2006-07 budget year, according to deputy revenue secretary Mark Muchow.

Much of that increase was driven by high energy prices, with severance tax collections (primarily from sales of coal and natural gas) up 12.6 percent, to $338.2 million, he said.

Meanwhile, the Rockefeller Institute of Government released a State Revenue Report on Tuesday showing West Virginia as one of only four states with tax collections up 10 percent or more from January through March, compared to the same quarter in 2007.

Overall, state tax collections came in a total of $109.2 million over projections for the budget year, Muchow said.

However, he noted that - with one exception - most of the upswing in major tax sources came in the first nine months of the budget year, which began last July 1, with downturns in the past three months.

For instance, corporate net/business franchise taxes came in at $338 million, up 8.6 percent compared to 2006-07.

However, those collections were up for the first nine months of the budget year, but fell below 2007 levels in April, May and June, he said.

"Corporations are suffering from higher energy costs, just like individuals," Muchow said Tuesday.

Likewise, personal income taxes brought in $1.519 billion in 2007-08, up 7.6 percent, but much of that increase was in stock market-driven capital gains in 2007 - something Muchow said the state can't depend on in 2008.

"The stock market is down 14 to 15 percent year-to-date," he said.

Another sign for concern: Consumer sales tax collections came in $47.5 million below estimates for the budget year, and down 0.5 percent from 2006-07 collections.

Muchow said the only major tax source that has seen a strong upswing in the past months is the severance tax.

For the first six months of the budget year, severance tax collections were up 2.3 percent; for the last six months that jumped to 23.5 percent as energy prices soared.

In November, he noted, the price of coal was about $45 a ton. Currently it's in excess of $100 a ton. The state severance tax on coal and natural gas is 5 percent of the sales price.

"Energy prices continue to surprise us on the upside," Muchow said.

"The bright spot right now is the severance tax," he said. "For most other components of general revenue, I don't see any real upswing in the next year."

As the new budget year begins, Muchow said he remains confident the state will bring in the projected $3.9 billion in tax collections in the 2008-09 state budget.

"Most economists are predicting relatively slow growth in the next four quarters," he said, adding, "Right now, I'm feeling very positive about the coming fiscal year."

Meanwhile, other states aren't faring as well, according to the Rockefeller Institute, with three states - Arizona, Montana and Florida - reporting revenue declines of more than 10 percent from January to March 2008, while 12 other states reported smaller percentage declines for the period.

That includes Ohio, which saw the largest dollar-amount decline in tax collections for the period, down $269 million from the same quarter in 2007, according to the institute's report.

Overall, states saw an average growth of tax revenue of only 1.7 percent for the January-March quarter, the report states, and indications are that tax collections will weaken further in the April-June quarter.

"Governors in some states may then face difficulty implementing their new budgets - raising the prospect of midterm cuts and other actions to eliminate emerging gaps," the report concludes.

Reach Phil Kabler at

ph...@wvgazette.com or call 348-1220.