It was a tough budget year for the governor and state Legislature.
After the regular legislative session ended March 15, lawmakers met in a traditional “extended session” to work on the budget. They appeared to be within hours of passing a 2017 budget when the Tomblin administration threw a big monkey wrench in the whole plan: state revenues would be $92.4 million less than estimated.
It was too big of a budget hole to solve right away, so legislators adjourned and came back May 16, but it still took 17 days of hand wringing, wrangling and debating to come up with a plan acceptable to the legislative majority and the governor.
But things aren’t going to get any easier. As much as everyone would rather see it reversed, West Virginia’s revenue picture is not likely to improve anytime in the near future.
“Revenue collections are expected to continue to lag, creating shortfalls in FY 2018 and 2019,” wrote West Virginia MetroNews political commentator Hoppy Kercheval. “It’s difficult to project the size of the shortfalls because of the volatility of the state’s economy, but they could be between $200 million and $300 million each year.”
West Virginia has experienced a loss of nearly 8,000 jobs, according to the 2016 West Virginia Economic Outlook. Permanent losses in the coal industry and temporary job losses in the natural gas industry combine to lower revenues from severance, income and sales taxes.
“West Virginia also has a people problem,” Delegate Chris Stansbury, R-Kanawha, wrote in a Daily Mail Opinion column June 9. “Our population is diminishing faster than any state in the nation, and less than half of our able-bodied citizens have work.”
“Most troubling of all,” Stansbury wrote, “is the fact that the state government has continued to escalate spending with no regard for these changing circumstances.”
He noted that between 1999 and 2015, the state budget has increased more than 60 percent — from roughly $2.7 billion to $4.3 billion.
The 2017 budget is down a bit, to $4.17 billion, but with expected revenue continuing to shrink by $300 million each year, the size of state government needs to shrink accordingly.
Many will call for tax increases to make up the difference. But the working West Virginian citizens and businesses that are paying the taxes are often struggling too.
Lawmakers must remember that any tax increase to maintain or increase the size of state government is still a budget cut — at least for the taxpaying citizens and business of West Virginia.
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