High gasoline prices are beginning to affect state gas tax collections, Revenue Secretary Virgil Helton told legislators Monday. In April, the state tax - 32.2 cents per gallon - brought in $30.5 million. That was $2.35 million, or 7 percent, less than projected for the month, Helton told the Council of Finance and Administration. Collections also were down $1.3 million, or 4 percent, compared to April 2007, when the gas tax brought in $31.87 million.
"The price of gasoline in the last two or three months has caused consumers to change their driving habits to the extent they can," Helton said. "You're seeing less gas consumed." He said gas prices also are affecting toll collections on the West Virginia Turnpike. Collections have been down about 5 percent in March and April, compared to the same months in 2007, he said.
As Senate Finance Chairman Walt Helmick noted, if the trend persists, it would be a major blow to a state Road Fund that already struggles to keep pace with demands for road-building projects
Gas tax collections - projected at $380 million for the 2008-09 budget year, which begins July 1 - account for 60 percent of the state's share of the state Road Fund.
Transportation Secretary Paul Mattox said recently that the state's priority list for new highway construction projects would cost more than $25 billion - meaning that most of the projects on the list will never be built.
Helmick, D-Pocahontas, said the Legislature needs to focus now on alternative ways to finance highway construction in the state. "We can't wait until next year to say, 'Where are we going to come up with another $40 million to $50 million for our road-building costs?' " he told the council. He also noted that, because state Road Fund dollars are used to match federal highway funds, the true impact of a downturn in gas tax collections could be in the $80 million to $100 million range in the 2008-09 budget year.
Meanwhile, overall state tax collections are running slightly above estimates this budget year, also because of high energy prices. With two months remaining in the budget year, the state had collected $3.29 billion in taxes - $168.7 million over projections, Helton said. Severance tax collections are at $295.9 million, or $40.8 million above estimates - driven by high coal and natural gas prices. That's 16 percent above estimates for the 2007-08 budget year, and $30.4 million or 11 percent ahead of the April 2007 year-to-date figure. The state severance tax on coal and natural gas is 5 percent of the sales price.
Helmick said he believes high energy prices also are reflected in corporate income tax collections (up 12 percent, or $36 million, over the estimated $255.1 million year-to-date) and in personal income tax collections (up 10 percent, or $113.65 million, over the estimated $1.1 billion).
Helton said he believes the state will finish with a budget surplus close to the current $168 million figure when the budget year ends June 30.
