4/2/2003

War Will Impact State Budget

Staff
Charleston

The ongoing war with Iraq will likely have an affect on revenue collections in West Virginia.

State Tax Department revenue expert Mark Muchow says personal income tax and sales tax revenues will take hits in a few months.

Muchow says the hundreds of West Virginia workers, who are members of the Guard and Reserves, won't be paying income taxes to the state as long as they are on active duty. He says the coverage of the war also keeps more people at home at out of shopping areas.

Muchow predicts there will be an impact on revenue collections later this year, but it won't be enough to increase the projected $30 million shortfall of revenue estimates at the end of June.

Muchow says the increase in the cigarette tax May 1 and the transfer of lottery proceeds will keep revenues from lagging either further behind.

Collections are currently $22 million below revenue estimates for the year. It was $37 million below estimates for March.