CHARLESTON — You won’t find any more concrete proof of a recession than a downturn in sales of new motor vehicles, and the state Department of Transportation is feeling the pinch in privilege tax collections. By the time this fiscal year ends, that could lead to some rollbacks in general maintenance projects, Transportation Secretary Paul Mattox acknowledged Thursday.
“We’re seeing a downturn in our collections, not only for vehicle registrations, but the privilege tax paid in the purchase of vehicles is way down,” he said while attending a meeting of the West Virginia Parkways Authority. “And it is a concern for us. Compared to last year, we’re way down and it doesn’t look like it’s going to improve any time in the near future.”
Revenues from the gasoline tax likewise have begun to shrink, but Mattox said the administration counted on that when the current fiscal year budget was pieced together. “We are meeting those projections in the budget,” he said.
Lined up with previous years, there is no question the gas tax yield is down, however, he said.
Above all, the privilege tax is taking the worst bite out of the highway fund, he said, since it has dipped between $10 million and $11 million.
“We just have to eliminate projects we had planned to do this year from our program,” Mattox said. He emphasized all regions of the state would be affected if curtailments are ordered and no one would be spared. “They will be all over the state of West Virginia, unfortunately,” he said.
“We’re mostly talking resurfacing projects and it could be some maintenance work on bridges or slips and slides. Right now, we’ve cut nothing, but as we get further into this fiscal year, at some point, we will have to make those adjustments to the program to stay within the budget.”
Overall, the Manchin administration has acknowledged a budget shortfall of $16 million in the first third of the fiscal year could balloon into a $100 million decline by next June 30. But revenue officials have stressed there is no reason to panic and that West Virginia is in much better shape than most states.
Mattox said federal stimulus dollars in no way are considered into the shortfall within the highway fund.
“The privilege tax is something that has just taken place in the last few months and it’s due to the recession,” he said. “We did see a slight increase in the Cash for Clunkers program, but it has not cured our problem.”