CHARLESTON — Tax collections in West Virginia for September and the first three months of fiscal year 2025 came in close to estimates as lawmakers consider a proposal from Gov. Jim Justice to reduce personal income tax collections next year by 5%.

According to a monthly report released by the Senate Finance Committee Tuesday, West Virginia general revenue collections for September were $567.7 million, .25% above the $566.3 million estimate set by the state Department of Revenue, providing the state with $1.4 million in surplus tax collections for the month. But September’s revenue collections were 15.5% below $672.1 million in collections last September.

Tax collections for the first quarter of fiscal year 2025 — July through September — were $1.307 billion, which was .09% above the $1.306 billion estimate and a fiscal year-to-date surplus of $1.2 million. First quarter tax collections were 7.8% below $1.418 billion in tax collections for the first three months of fiscal year 2024.

According to the Department of Revenue, the state repaid $12.9 million that was borrowed from the personal income tax reserve fund in the months of July and August, bringing September’s total surplus to $14.3 million. That repayment brings the tax revenue surplus for the first quarter to more than $14 million.

“We started out rough in July and August and we drifted to where we were under water,” Gov. Jim Justice said Tuesday afternoon during his weekly administration briefing at the State Capitol Building. “We’re back above water now … We’re watching it and staying on top of it.”

Personal income tax collections for September of $239.3 million were 1.6% below the $243.2 million revenue estimate, with first quarter personal income tax collections of $533.4 million coming in 3.1% below the $550.5 million revenue estimate. September collections were also down 25.4% from $320.9 million in collections last year, and first quarter collections were 12.2% below collections last fiscal year of $607.5 million.

Justice called the West Virginia Legislature into special session Monday to consider a 5% cut in personal income tax rates beginning in January 2025 that would return approximately $115 million to taxpayers. The 5% cut would be on top of a 4% personal income tax cut going into effect at the beginning of next year and returning $92 million to taxpayers.

The personal income tax makes up nearly 40% of collections for the state’s general revenue budget.

While Republicans in the Legislature support phasing out the personal income tax, some have raised concerns about Justice’s 5% cut and whether the state budget can absorb that cut in the next fiscal year that will be worked on by next year’s Legislature and the next governor after Justice finishes his second and final term at the end of the year.

“It just gives us hesitation on just jumping in on this 5% tax cut,” said Senate Finance Committee Chairman Eric Tarr, R-Putnam. “I’m doubtful, just because of the revenues that are coming in slower than they have for the past few years right now.”

Other tax revenue streams were close to estimates but slightly below. September consumer sales and use tax revenue of $165.1 million were .21% below the $165.4 million estimate, with quarterly sales tax collections of $423.9 million were .41% above the $422.2 million estimate, providing the state a $1.7 million surplus.

September corporate net income tax collections of $56.2 million was 19.4% below the $69.8 million estimate. First quarter corporate net income tax collections of $80.1 million was 4.9% below the $84.2 million estimate. Severance tax collections for coal and natural gas for September were $45.7 million, which was 28.1% above the $35.6 million estimate, providing the state a $10.1 million surplus. But quarterly severance tax collections of $74.2 million were 4.9% below the $78 million estimate.