The House Committee on Finance met at 2 p.m. Thursday afternoon to discuss the current economic state of West Virginia, the projected economic growth that the state will see, and possible implications that may come with Governor Justice’s proposal to deduct Social Security taxes.

The West Virginia Department of Revenue provided the data that drove the presentation given during the committee. Mark R. Muchow, the Deputy Revenue Secretary for the West Virginia Department of Revenue, presented and interpreted the figures.

The West Virginia Department of Revenue reported accelerated growth since late 2016. General revenues are also projected to grow 13.5 percent in the first half of 2019.

Economic projections are calculated when taking the figures from Justice’s revenue proposal into consideration, and the data generated takes these policies into account.

State road fund collections are expected up exceed estimates, and have already increased 20 percent since the 2017 fiscal year. Lottery revenues also will continue to increase from the prior year, and the construction sector is expected to boom.

“2018 is one of the best years we’ve seen in a decade or so,” Muchow said on the current state of the West Virginia economy. “We’re going to continue to see a lot of growth in construction and leisure and hospitality.”

One major reason for the state’s above average growth in the construction sector is the effect the pipeline industry has had on the state’s economy.

Muchow’s major concern for the state in terms of economic standing was the continuing decline of the manufacturing sector.

“The manufacturing sector continues to underperform,” Muchow said. “This impacts locations in the state that once relied on manufacturing—such as Huntington and Charleston.”

Despite the manufacturing sector falling short, the state is estimated to grow their revenues by at least 1.9 percent. By 2020, they hope to increase revenue by at least 2 percent.

Muchow cited that the biggest state expenditure to the state would not be the $50 million it would cost under Justice’s plan to cut taxes for Social Security recipients, but the $150 million it would cost to dedicate enough money to PEIA to provide a satisfactory cushion for state workers for the next few years.

“We appear to be on the upswing overall. Pipeline business is growing, energy is increasing, and our health sector is continuing to improve as well.”

The House Finance Committee will meet at 9am Jan. 11 in 460-M to hear the West Virginia Attorney General’s Budget Presentation, as well as a budget presentation from the West Virginia Lottery.

The Senate Committee on Finance convened for a Budget Presentation 9:30 a.m. Thursday, Jan. 10.

Mark Muchow, deputy secretary of revenue, updated committee members on the past fiscal year and presented a forecast for the approaching months.

Muchow said that since 2016, the state’s economy has seen growth which can be accounted to major pipeline investments, the Governor’s Road to Prosperity Program, a general revenue growth of 1.5 percent in the first part of the 2019 fiscal year and a 20% total increase in coal production since 2016.

As the national employment rate is predicted to rise by 4.9 percent, Muchow said that the state’s employment rate will rise by 2.2 percent despite above average employment growth in the construction sector. Muchow said that demographics continue to hinder WV’s workforce.

In addition to a rise in WV’s employment, Muchow said that wages within the state will approach the national average following a decline in 2018.

In the presentation Muchow also said that personal income taxes will see an average annual growth of 9.1 percent from 2018-2024 while consumers sales tax will experience an average annual growth of 3.5 percent from 2018-2024.

Muchow’s final baseline forecast predicted a good fiscal year for 2019 which could see a slowdown in economic growth and a possible recession in 2020 following a slowdown in the state’s oil and natural gas industries.

Despite a possible recession, Muchow said that the state grew 3-4 percent in coal production while production in surrounding states declined. Muchow said a surge in state exports, such as coal, help money build up and improve economic growth.