After a record-breaking April, West Virginia’s tax collections in May dipped slightly, but the state remains on pace to end the fiscal year with a surplus.
The West Virginia Department of Revenue reported Monday that general revenue collections for May came in at $349.9 million, just $154,000 below expectations. That’s a big slowdown from April’s dramatic $643.8 million haul, which exceeded projections by nearly 27%.
Despite the dip, the overall picture remains strong. For the current fiscal year — which ends June 30 — West Virginia has collected $4.9 billion in taxes, about 5% above the estimate of $4.7 billion. That leaves the state with a $236.9 million surplus heading into the final month.
But much of that surplus has already been earmarked.
During the 2024 legislative session, which wrapped up in April, lawmakers approved $126.2 million in supplemental spending, using one-time surplus funds. That leaves about $110.8 million in unallocated surplus as the new fiscal year approaches.
Where the Surplus Is Going
Some of the biggest chunks of funding include:
- $39.4 million for Medicaid (Department of Human Services Medical Services)
- $28.4 million for the Hope Scholarship program, which offers educational vouchers
- $100 million for the Division of Highways for critical road maintenance and paving projects
Looking ahead, the Legislature passed a $5.318 billion budget for fiscal year 2026. Governor Patrick Morrisey signed off on it but trimmed the total to $5.28 billion by issuing 29 line-item vetoes.
Tax Breakdown: What’s Fueling the Surplus?
While May saw a drop in personal income tax collections — coming in at $98.9 million, which is 6.5% below projections — the year-to-date figure still sits at $1.9 billion, which is $92.3 million over estimates. That category alone accounts for nearly 39% of the surplus.
Corporate net income tax was a drag in May, largely due to refunds. The state actually collected negative $7.8 million — that’s 175% below the expected $10.4 million. Still, the year-to-date figure stands strong at $320.8 million, or 23% above projections.
The consumer sales and use tax was a bright spot in May, bringing in $170.9 million, 4.7% higher than forecast. Year-to-date collections are now $1.64 billion, about $11.5 million over target.
Another positive sign: the severance tax — collected on coal, gas, and oil — bounced back in May to $47.5 million, a whopping 40.5% above estimates. That brings the year-to-date total to $347.1 million, just a hair below projections for the year.
Governor Urges Fiscal Caution
Gov. Morrisey praised the overall stability of the numbers while urging caution.
“Last month’s General Revenue Fund collections show that we must remain vigilant and focus on ensuring financial stability,” he said. “We will continue to make fiscally responsible decisions to set up West Virginia for a prosperous future.”
With just one month left, West Virginia appears well-positioned to close the books on fiscal year 2025 in the black. But with most surplus dollars already spoken for, state leaders are emphasizing smart spending over celebration.
