West Virginia Ends Fiscal Year with $370 Million Surplus, Rainy Day Fund Nears $1.5 Billion
CHARLESTON, W.Va. — West Virginia closed Fiscal Year 2026 with one of its strongest financial performances in recent years, collecting more than $5.69 billion in General Revenue and finishing the year $370.7 million above budget estimates, according to year-end figures released Wednesday by the West Virginia Department of Revenue and the West Virginia Senate Finance Committee.
The state collected $5.693 billion in General Revenue during Fiscal Year 2026, surpassing the official estimate of $5.323 billion by approximately seven percent. June provided a strong finish, with $569.7 million collected during the month, exceeding projections by more than $57 million. Overall, West Virginia collected 107 percent of its projected General Revenue for the fiscal year.
The latest figures continue a trend of West Virginia outperforming revenue estimates, providing additional flexibility as the state’s Fiscal Year 2027 budget takes effect.
Governor Patrick Morrisey said the state’s financial performance reflects a continued focus on fiscal discipline.
“When you focus on the fundamentals and exercise fiscal discipline, we put West Virginia in a position to end the fiscal year strong as revenues continued to outpace our projections,” Morrisey said.
Morrisey said the surplus will allow the state to fund every obligation included in the budget, including $125 million for roads and infrastructure, fully fund the Hope Scholarship, and continue investments in education, foster care, law enforcement and tax relief.
Personal income tax continues to lead revenue growth
West Virginia’s largest revenue source once again exceeded expectations during Fiscal Year 2026.
Personal Income Tax collections totaled $2.18 billion, finishing $159.4 million above estimate. June collections alone reached $237 million, nearly $49 million higher than projected. Despite continued reductions in state income tax rates over the past several years, collections still increased approximately 2.5 percent compared to the previous fiscal year.
Consumer spending also remained strong throughout the year.
Consumer Sales Tax collections reached $1.95 billion, finishing $41.5 million above estimate while increasing more than $131 million compared to Fiscal Year 2025. Revenue officials noted, however, that recent sales tax growth has slowed and remains below the current rate of inflation.
Energy revenues remain a major contributor
West Virginia’s energy industry continued to play a significant role in the state’s financial performance.
Severance Tax collections totaled $534.9 million, exceeding projections by nearly $137 million and finishing the year at 134 percent of estimated collections. The total represented an increase of approximately $95 million over Fiscal Year 2025.
Revenue officials cautioned that severance taxes remain one of the state’s most volatile revenue sources because collections are heavily influenced by energy markets and global events.
Corporate Net Income Tax collections were among the few major revenue categories to finish below expectations, ending the fiscal year approximately $8 million below estimate and nearly $70 million lower than the previous year.
Rainy Day Fund Nears Historic High
While the annual surplus drew much of the attention, the state’s financial reserves also reached another significant milestone.
According to the Senate Finance Committee’s year-end report, West Virginia’s two Revenue Shortfall Reserve Funds—commonly known as the Rainy Day Funds—now hold a combined balance of $1.48 billion, an increase of more than $133 million compared to one year ago.
The current balances include:
- Rainy Day Fund A: $814.9 million
- Rainy Day Fund B: $665.9 million
- Combined Rainy Day Fund Balance: $1.48 billion
The reserve funds are designed to help stabilize state finances during economic downturns or unexpected revenue declines and remain among the strongest in West Virginia history.
Looking Ahead
Fiscal Year 2027 officially began July 1 with a budget that includes continued investments in transportation infrastructure, education, economic development, public safety and additional tax relief.
While corporate income tax and tobacco tax collections continued to soften, strong performances in personal income taxes, consumer spending and energy production helped drive another year of revenue growth.
The combination of another budget surplus and nearly $1.5 billion in Rainy Day reserves positions West Virginia to enter the new fiscal year on solid financial footing while maintaining one of the strongest reserve funds in state history.
Editor’s Note: Fiscal Year 2026 concluded on June 30. West Virginia’s Fiscal Year 2027 officially began July 1 under the state’s newly adopted budget.
