CHARLESTON, W.Va. --  State tax collections remained stronger than expected in August, sparking hopes that the state's economy is emerging from the national recession.

"Signs are that the economy is improving a little bit," Deputy Revenue Secretary Mark Muchow said Tuesday, adding, "The economic growth we're seeing has been a little bit ahead of expectations."

The big three sources of state tax revenue -- personal income taxes, consumer sales taxes and severance taxes -- were all ahead of projections for August, he said.

August sales tax collections of $96.8 million were 4.5 percent above estimates and 9 percent above August 2009 collections.

"The sales tax is probably the best indicator of how things are going currently in the economy," Muchow said.

Personal income taxes came in at $119.9 million for the month, nearly 11 percent above estimates, and 15.4 percent ahead of last August.

Those figures have been helped by increases in employment in manufacturing and mining, fields that "tend to have higher-than-average salaries," Muchow said.

Severance tax collections for the month of $47.7 million were 12.6 percent above estimates and more than double August 2009 collections, he said.

He said that's a factor of both increases in coal production, and of higher coal prices -- up to $70 a ton on the spot market -- compared to August 2009.

Overall, the state took in $309.1 million in tax collections in August, about $31.1 million above estimates.

Since the budget year began on July 1, tax collections are up $64 million, or 26 percent, over the same period in the 2009-10 budget year, he said.

Excluding one-time transfers from state Lottery surplus, and $14.1 million from sales of 10-year liquor retail licenses, tax collections are still running more than 10 percent of last year's pace, Muchow said.

"All in all, we're on track," he said.

Reach Phil Kabler at ph...@wvgazette.com or 304-348-1220.