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Storm outages lead to lower state revenues

CHARLESTON, W.Va. -- State revenue collections for August came in about $14 million below estimates, as power outages after major summer storms affected payrolls in July, and as markets for coal and natural gas remained soft, the state deputy revenue secretary said Tuesday.

The state collected a total of $287 million in August, below the estimate of $301 million.

"Most categories met or exceeded estimates, with two major exceptions," Mark Muchow said.

Personal income tax collections of $114.4 million were $13.9 million below estimates, with payroll withholding taxes falling 8.6 percent below projections.

"That's a major reversal from where we've been," said Muchow said, noting that the withholding tax was 8.6 percent over estimates in July, and was up 8 percent in August 2011.

He said the downturn may reflect that many businesses were closed, and many employees were unable to report to work for days after the June 29 derecho because of extensive long-term power outages statewide.

Those lost workdays would show up as a downturn in August withholding tax payments.

"That may have played a role in the August figures," Muchow said.

Sales tax collections of $96.4 million, meanwhile, came in $4.3 million ahead of estimates.

Likewise, Muchow that could reflect the aftermath of the derecho, as households restocked groceries, purchased generators, and repaired storm damage.

Fiscal year-to-date sales tax collections of $201.3 million are 7/10ths of a percent below the 2010-11 budget year, but that's because the sales tax on food dropped from 3 percent in 2011 to 1 percent currently, he said.

Severance tax collections of $35.9 million were $9.1 million below estimates, and down 46 percent from August 2011, Muchow said.

He said that a downturn in market demand for coal, coupled with lower coal prices, as well as ongoing low natural gas prices, have hurt severance tax collections.

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


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