Senate Finance hears West Virginia revenue outlook; FY2026 estimate rises 1.1% amid large tax cuts

At a meeting of the West Virginia Senate Finance Committee, Pete Shirley, deputy secretary for the West Virginia Department of Revenue, presented the department’s revenue outlook and an official general revenue estimate of $5,323,157,000 for fiscal year 2026.

Shirley said the FY2026 top-line shows modest growth — about $58.6 million, or 1.1% — compared with the FY2025 official estimate, but that recent and pending personal-income tax reductions will mute revenue gains and make forecasting more uncertain. "This is our revenue outlook for fiscal year 2026," Shirley said, opening the presentation.

The nut graf: the forecast balances modest continued wage and employment growth against a series of tax changes enacted by the Legislature. Committee members pressed department staff on the drivers of the forecast — particularly severance (coal and natural gas), interest income and the effect of the Legislature’s recent personal-income tax cuts — and raised questions about labor-force participation and local production disruptions.

Shirley summarized the economic inputs behind the forecast: national and state growth that is slowing but still positive; continued wage growth; a small projected uptick in unemployment by 2026; and a mixed outlook for commodity-related revenues. He told the committee the department used an S&P Global baseline forecast and Bureau of Labor Statistics and BEA…