CHARLESTON Governor Patrick Morrisey said this week that West Virginia is facing a projected budget deficit of several hundred million dollars for the next fiscal year.
He had first mentioned a $400 million shortfall during his first week in office and provided more details during a recent update. According to Morrisey, the state’s reliance on one-time funding to fill gaps is part of the problem, and it’s not a practice that can continue.
“If you keep just paying the bills with one-shot money, what happens? You run out of one-shot money and you’re still left with a big deficit,” he said. “There’s a reason you have a rainy day program; you have a rainy day program because you’re trying to prepare for an emergency, not to pay the base bills.”
He pointed out a $153 million shortfall in Medicaid spending, which has been temporarily covered with one-time funds. However, Morrisey said this approach won’t work in the long run. Another area of concern is the Public Employees Insurance Agency, where a $62 million shortfall is tied to costs that were artificially held down in past years. Morrisey explained that this was an attempt by the previous administration to control growth in the PEIA budget.
“This $62 million does not address the problems – many of the issues you’ve been hearing about. What does that mean? That means that, when there’s projections of 14.4% increases in terms of the dollar premium rates, this is not what addresses that. This is the base increase to make the formula quote which they artificially suppressed in previous years – sixty-two million for that alone,” Morrisey said. “That’s a significant dollar fee.”
Moreover, the state faces a $12 million shortfall from the funding formula for higher education. There’s also a $29 million drop in local property tax collections, which will require the state to increase its funding under the K-12 school aid formula. The Hope Scholarship program is adding to these costs as well.
Morrisey also highlighted a $13 million shortfall in the tourism budget, which has been relying on one-time funding. And the Division of Corrections and Rehabilitation needs another $47 million to cover expenses through June of this year. He said that money will be needed by March, and this issue is expected to carry over into next year due to how it’s built into the budget. Additionally, there’s a $22 million expense tied to the public defender program, which is required to meet legal obligations.
The governor expressed concern over recent personal income tax cuts, which he said haven’t been fully accounted for in the state’s spending plans. He noted that the 4% tax cut has reduced revenue by around $96 million, while the 2% cut adds another $46 million to the gap.
Along with addressing the budget issues, Morrisey announced several new appointments to his administration. Brigadier General Jim Seward will take over as the new West Virginia National Guard Adjutant General, replacing Bill Crain, who is retiring. Morrisey also shared plans to combine the adjutant general’s duties with leadership of the Department of Homeland Security. Ryan Kennedy has been named secretary of the Department of Veterans Assistance, and Jim Mitchell will become superintendent of the West Virginia State Police.
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