West Virginians Buy Less Gas

West Virginians Buy Less Gas  

Publication: MetroNews
Release Date: 06/02/08

The state of West Virginia has seen its third straight month of motor fuel tax collections below estimates.  State Tax Revenue Expert Mark Muchow says May's collections missed the mark by $5 million. He says the total deficit for the last three months is $8 million.

Muchow says although year-to-date receipts for the fuel tax are still nearly 10 percent above last year's collections, the last three months are worth noting.

"Three consecutive monthly deficits in the terms of collections versus estimates," Muchow said. "People are consuming less gasoline and are a little cautious of their driving habits."

Muchow says there was a big decrease in consumption when gasoline prices hit $4.00-a-gallon a few weeks ago. "It had some impact when it comes to people's behavior in terms of driving," he said.

The state Road Fund, which finances highway projects, gets all of its funding from the state Motor Fuel Tax. Muchow says the funds are hurting in all 50 states. He says the legislature in Virginia is currently in special session looking for other ways to pay for highway work.

Muchow says if consumption numbers continue to go down, the price for gasoline will eventually follow.

"At some time demand and supply will be brought back into balance and you'll see a bit of a drop in gasoline prices," Muchow said. "Depending how much and how fast gasoline prices decline will reflect on whether or not people will again adjust their habits."

The state's overall revenue picture appears solid heading into the final month of the fiscal year. Severance tax collections, mainly from coal, were up 25 percent in May and are $50 million more than last year at this time.