February 13, 2025 - WV State Deputy Revenue Secretary Mark Muchow says there is a key reason why severance tax collections are severely down in West Virginia.

In January, the state collected $478 million in taxes, around $13.8 million less than projections. One of the contributing taxes that missed the mark last month was severance taxes, which was around $28 million below estimates.

Muchow spoke before the Joint Committee on Government and Finance Tuesday in Charleston. He says the cold weather is the driving force.

“The cold weather is causing natural gas inventories to deplete a little more than originally expected, and as a result, natural gas prices are rising,” Muchow said.

Along with severance tax collections missing the mark in January, the year-to-date stats tell a similar story. The state has collected $147.6 million, nearly $60 million below estimates.

Muchow says he expects a different outcome in the next part of this fiscal year.

“The big reason why our severance tax collections declined over the last two plus years was lower prices, so I believe in the coming months, we will see improved severance tax collections, particularly from natural gas and maybe a little bit on the steam coal side,” Muchow said.

Muchow also says the prices of coal and natural gas are lowering, and the state will soon see that on its reports.

“Coal prices are down about 20-25% from a year ago. Natural gas prices have still drifted lower, but in recent months, natural gas prices have turned around and are moving on up, and I think that will start showing up in the February revenue collection numbers,” Muchow said.