After months of bleeding red, the state's revenue collections for February look positive on paper - but only because of nearly $70 million of "budget fixes" used to close deficits in the current 2015-16 budget year, state Department of Revenue officials said Thursday.
"To the unsophisticated eye, it may look like February was a relatively good month, but that is not true," said Revenue Secretary Bob Kiss.
On paper, February tax collections of $312.27 million were up $90.6 million over February 2015 and $51.6 million over estimates for the month.
"On the surface, the number you received for February looks pretty good," Deputy Revenue Secretary Mark Muchow noted.
However, the 2016 figure was bolstered with Rainy Day fund and other funding transfers totaling $58.54 million to help balance the 2015-16 state budget. Also, the revenue report inflated personal income tax collections by about $20 million with funds transferred under legislation passed in February.
Once those funds were backed out, February tax collections missed estimates by about $17.8 million, officials said.
The main laggard continued to be severance taxes, hurt by continuing low energy costs, with $25.17 million of taxes falling $31 million below estimates.
Sales tax collections of $83.6 million fell $6.4 million below estimates for the month, as lower employment rates and sluggish personal income figures are slowing consumer purchases, Muchow said.
For the budget year, the state remains about $117.8 million, or 4 percent, below estimates with $2.54 billion in tax collections.
Kiss said he believes the February revenue figures show that the 2015-16 budget shortfall is widening beyond the $354 million estimate from the start of the 2016 legislative session, but he said he will have a better handle on that deficit after March revenue figures come in.
A widening budget gap makes it more critical that the Legislature act on the Tomblin administration's plan to shore up state revenue, he said.
"It's now, more than ever, critical for the Legislature to either adopt Gov. Tomblin's plan to shore up the current year's budget or come up with a responsible plan that generates an additional $29 million for fiscal year 2016, and assures a balanced budget for fiscal year 2017," Kiss said.
"It becomes ever more important in the next 10 days that the governor's solution be implemented, or something comparable to it," Kiss said, referring to the days remaining in the 2016 regular session.
Legislative actions have closed all but about $29 million of the current year's budget deficit, but the Legislature has not passed either of two revenue enhancement measures proposed by the governor at the start of the session.
Legislators failed to act on a 6 percent sales tax on telecommunications services that would have raised $60 million a year, while a bill to increase tobacco taxes to raise at least $71 million a year passed the Senate, but didn't make it out of the House Finance Committee on Thursday.
"The governor's plan works," Kiss said. "But at this point, the governor's plan hasn't been implemented."
Without new revenue sources, the $138 million gap would have to be closed through spending cuts, Kiss said, citing reports prepared earlier this session for the House Finance Committee outlining possible agency cuts.
"There would be closures in some instances ... there would be some layoffs in some instances," he said.
On Thursday, Tomblin said it is possible the Legislature will need to come back in special session to complete the budget.
Normally, the Legislature completes work on the budget bill during an extended session in the week following the end of the regular session.
Tomblin said he will issue an order next week extending the session for three days after the regular session ends March 12 to work on the 2016-17 budget, and if the Legislature is at an impasse at that point, he said, "I think it would be better to adjourn and come back in special session some time later."
Reach Phil Kabler at philk@wvgazette.com, 304 348-1220, or follow @PhilKabler on Twitter.