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Hiring free and cuts help West Virginia end fiscal year with small surplus

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CHARLESTON, West Virginia — A hiring freeze and budget cuts have helped West Virginia end the fiscal year with a small surplus.

General revenue collections for the fiscal year that ended Tuesday were about $60 million below estimates. A mid-year budget cut and a hiring freeze saved the state more than $38.9 million, which helped to close the gap, the Department of Revenue said in a news release.

Gov. Earl Ray Tomblin's administration used about $12.6 million in unspent funds in state agency accounts, a $7.5 millionl appropriation from the Legislature and other budget adjustments to make up the shortfall. The state ended the fiscal year with a $1.3 million surplus, the department said.

"We had to do some maneuvering to compensate for the losses in severance tax revenue. The governor put a strong plan in place from the start and it served us well in the end," Revenue Secretary Bob Kiss told media outlets on Thursday.

Kiss and Deputy Revenue Secretary Mark Muchow attributed the shortfall to a drop in coal and natural gas prices.

Average coal prices declined by about 10 percent and average natural gas prices dropped by about 30 percent from the previous fiscal year. As prices fell, the state's total severance tax collections declined by more than 15 percent, from $488.7 million in fiscal 2014 to $414.2 million in fiscal 2015.

"We are seeing less severance tax than we anticipated," Kiss said. "If that continues, it could be a double-whammy in the sense that it's not only being driven by reduction in prices, but at some point will cause a reduction in production."

Personal income tax collections increased by 10.4 percent, or nearly $173 million, following a 2.2 percent decline in fiscal 2014. Personal income tax collections were about 43 percent of the general revenue collections, the Department of Revenue said.

West Virginia's Constitution requires the state to end the fiscal year with a balanced budget.

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