STATE HAD WORST $$$ MONTH IN YEARS - Employment Growth Down

(12/05/2007)

Despite upbeat employment numbers, the State of West Virginia just had one of its worst financial months in several years. State Revenue Expert Mark Muchow says tax collections for November was down for the month, missing projections by $35.3 million. Muchow indicated there are a number of reasons for the major slump, including a slow down in employment growth. "The numbers are running 50 percent of what they were a year ago," Muchow said. "Most of the employment growth is in the service sector and the last three years we had growth in the goods producing sector, particularly in mining and construction." "Now, the goods producing sector this year is actually losing jobs," he said. Muchow says year-to-date the state's tax collections are still ahead of estimates by about $43 million. Muchow says the slow down will probably continue for the rest of the current budget year. With hints of recession popping up for the USA, he says "That's one of the reasons why the Federal Reserve Board is about ready to meet shortly and reduce interest rates again."

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