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.
