Tag: State Budget

Gov. Justice Outlines Multifaceted Plan To Fix Budget Hole, Spend Federal Coronavirus Aid

Gov. Jim Justice says his office has found a way to cover what’s expected to be a $250 million budget hole. The governor rolled out the plan in a midday meeting with top lawmakers on Friday before releasing it to the general public.

In a virtual news briefing, Justice outlined the state’s financial situation, which has been negatively impacted by the coronavirus pandemic. His plan routes federal aid dollars to various state agencies and pulls from the Medicaid surplus fund to cover the budget gap. 

For weeks, Justice has said he believes federal aid would become available for states to backfill budget shortfalls related to the coronavirus pandemic. Although federal rules released alongside the CARES Act explicitly prevent that from happening, the governor’s office plan appears to replace already allocated state dollars — now being spent on response to the coronavirus — with the federal aid.

Justice said Friday some funds that were already dedicated to state agencies will be replaced by nearly $1.25 billion from the federal CARES Act. Justice explained that the funds from the CARES Act will be directed to local governments, small businesses, local public service districts, highways, hospitals and for unemployment benefits. 

Additionally, $150 million from the state’s Medicaid surplus will be directed to the general revenue budget. 

“We have CARES money and we have other grant monies that have come into West Virginia,” Justice said, noting that more than $2.2 billion in federal coronavirus aid has so far come to the state. “And we’ve got to find the right — the appropriate — places to put it up.”

During the press briefing, Justice’s general counsel Brian Abraham said the state sought out an outside consultant to make sure the governor’s office had the authority to use federal money to cover the general revenue budget. 

State lawmakers from both parties said the plan was explained to them in Friday’s meeting. Some Democrats expressed frustration over not being able to offer input on the budget situation. 

Sen. Roman Prezioso, D-Marison, said the governor arrived about 40 minutes late to the meeting with lawmakers. Prezioso, who attended the meeting virtually, said he and other Democrats invited to the meeting wondered why the financial plan doesn’t fall under the Legislature’s purview. 

“He’s not gonna muck it up with a special session,” Prezioso said of the meeting with Justice and proposed budget fix. “He’s said he’s not going to have a food fight by bringing the Legislature in.”

Senate President Mitch Carmichael, R-Jackson, described the meeting as “informational” and said lawmakers did not offer input on the plan. 

“We accommodated the governor’s request to go meet for the purpose of him explaining his views on spending the CARES money and getting through June 30 and the fiscal year,” Carmichael said, “That was something initiated by the governor’s office.”

Carmichael, who lost a primary election earlier this month, will hand over the gavel when the Legislature returns for its next regular session in February. But as the current leader of the upper chamber, he said he feels as though the Legislature should have control over how the state’s money is spent. 

“I always think that all expenditures should be made by the Legislature and allocated by the Legislature. I’ve always felt that way,” Carmichael said.  “And now, my understanding is that the CARES Act — and those legal opinions that the governor’s office has provided — that enable governors to have wide discretion on the manner in which this money is invested and spent.”

Justice said the state is expected to wind up with a $10 million surplus once the new fiscal year begins on July 1. 

Gov. Justice: Special Session Not Needed To Fix Budget Hole

West Virginia Gov. Jim Justice says the state’s budget will be in good shape despite a significant hole in revenue due to the ongoing coronavirus pandemic. 

Despite earlier saying he would call the Legislature into a special session to handle an anticipated $300 million deficit for the current fiscal year, Justice said Monday the state has enough cash on hand to make it to the end of the month. 

Justice has remained hopeful that federal aid will be made available to cover a shortfall, although congressional rules prevent funds already allocated from being used to cover state budgets. 

The governor says he has created a committee that will meet later this week to address revenues.

The state’s fiscal year turns over on July 1. 

With coronavirus cases on the rise in the state, Justice has urged residents to wear a mask in public to prevent spread. However, he says he won’t mandate people wear masks because it would be a divisive issue.

 

New Treasury Rules Block Backfilling Budgets, But Justice Remains Optimistic About Federal Funding

With response to the coronavirus translating to a projected shortfall in the state budget of about $500 million, Gov. Jim Justice remains optimistic that West Virginia will be able to get federal aid to backfill losses in revenue. That’s despite federal guidelines released Thursday from the Trump Administration that dictate how states can use funds. 

According to guidelines issued by the U.S. Department of Treasury, states are not allowed to use funds from the CARES Act to backfill revenues lost as a result of the pandemic. 

“Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute,” the guidelines state. “Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments.”

The question remains how the state will manage to make up missing revenue and whether the Legislature will be called upon to make use of part of the state’s $850 million in Rainy Day funds. 

This week, Justice said West Virginia received the federal minimum of $1.25 billion in relief funding under the federak CARES Act. Asked during recent virtual briefings how he would address a budget shortfall, Justice said he hoped the federal rules would allow state officials to cover an anticipated deficit. West Virginia is expected to lose nearly half a billion dollars, according Revenue Sec. Dave Hardy. 

Despite the newly-released federal guidelines, Justice said he remains optimistic about being able to use federal funds to shore up the state’s bottom line. 

“I think that there’s a high probability that the rules will be changed to allow the backfilling of the revenue and I’m very confident things are gonna be just fine,” he said when. 

But Justice didn’t say why he believes the federal guidelines would be changed.

“I can’t go into a lot of the inside baseball stuff that, maybe, I know. But I really feel like we’re gonna be able to weather this storm from a financial standpoint in very good shape,” he said. 

If federal funds are not authorized for the budget shortfall, state lawmakers would have to return to session to address the funding gap before June 30. 

Asked whether it would be most prudent to begin to make cuts to the state budget sooner rather than later when, Justice said that layoffs and furloughs of state workers are not being planned at this time.

State lawmakers who would be called back for the budgetary tweaks say there are a lot of unknowns about what might play out, given the uncertainty around federal aid how states can use the funds. 

“It’s a wait-and-see situation,” Senate Finance Chair Craig Blair, R-Berkley, said by phone Thursday. 

Blair said he expects a special session to address the budget would be done quickly, but he said not to plan on it before mid-June. 

“I think it will be an effort done with the House and Senate and governor combined, but I don’t think you’ll see a special session before the primary election,” Blair said. “There are a lot of unknowns right now and to do anything would be premature.” 

The state’s primary election is set for June 9. 

Members of the minority party also say there are a lot of unknowns about the state’s fiscal situation. 

“I think the reality is that we will need to address this,” said House Finance Minority Chair Mick Bates, of Raleigh County. “I don’t see any other way to fix a fiscal hole in 2020.”

Bates said the state should begin to make quick use of aid from the CARES Act.

“If he’s gotten the $1.25 billion, we need to be spending it,” Bates said Thursday, while questioning whether the Legislature should play a role in how federal aid is rolled out. 

But like Justice, Bates also is optimistic that federal funds will wind up being used to cover any gaps in the state’s budget. Regardless of whether it comes from the latest relief package or others pending in Congress. 

“I do think, ultimately, there will be federal funds to close holes in budgets,” Bates said. Subsequent bills [from Congress] may allow for additional flexibility.”

West Virginia Senate Report: October Revenues $3.3 Million Below Estimates

Updated Friday, November 1, 2019 at 2:47 p.m.

State budget revenues again came in under estimates for the month of October. The latest numbers continue a downward trend that has state officials preparing for budget cuts.

A preliminary report from the West Virginia Senate’s Finance Committee says state revenue collections were down $3.3 million in October.

 

The report says personal income, consumer sales and severance taxes were all below estimates. 

Now four months into the fiscal year, the state is more than $33 million behind year-to-date estimates. 

Revenue Secretary Dave Hardy last week warned of up to $100 million in budget cuts for the current and upcoming fiscal years. He attributed the downturn in revenue to volatility in severance tax collections from natural gas.

 

West Virginia Legislature Readies to Complete Budget on Final Day of Session

The West Virginia Legislature is set to vote on a 2018-19 state budget on the final day of the 2018 regular session. The $4.38 billion spending plan accounts for an across-the-board average 5-percent pay raise for all public employees and makes cuts to programs that had earlier seen proposed increases by Gov. Jim Justice. The budget will allow for $156 million in spending as compared to the previous fiscal year.

In a Friday evening floor session, the House of Delegates adopted an amendment to the budget, Senate 152, that folded in the chamber’s own version of the bill — with minor differences in how general revenue surpluses would redirected, according to members of each party.

“For the first time in four years we are not touching our savings account. Our Rainy Day Fund is unchanged,” said House Finance Chairman Eric Nelson before the amendment was adopted.

The Senate is expected to formally agree with the House’s changes to Senate Bill 152 once it heads to a vote in the House. That vote is expected Saturday.

A motion Friday in the House to suspend constitutional rules and put Senate Bill 152 up for a vote failed on party lines, with Democrats blocking majority Republicans’ effort to have the budget completed going into the final day of the session.

The Senate cleared its original budget proposal Thursday on a 33-0 vote.

During his State of the State address this year, Gov. Justice touted proposed increases to programs such as tourism and other efforts in state Department of Commerce’s Development Office. A proposed $14 million increase to tourism would be slashed, as would roughly $32 million in the governor’s proposed increases to the Development Office.

The cuts come as lawmakers in both the House and Senate refused in the end to make use of $58 million increase in adjusted revenue estimates for Fiscal Year 2019. Senate Republicans were quickly skeptical of those numbers, which House leadership eventually backed off on using the adjustments in their final budget. Those adjusted revenue estimates were announced Feb. 27 by Gov. Justice as part of a deal between he and union leaders to end the teacher walkouts.

House Bill 4145, which was finalized Tuesday and ended nine days statewide walkout of school employees, offers the raise to teachers, service personnel and state police. Salary increases for the remainder of public employees is a result of increases to personnel line items for each state agency.

West Virginia Tax Receipts Lag Behind Estimates

West Virginia officials say weaker results in January have caused state tax collections for the first seven months of the fiscal year to lag 1 percent…

West Virginia officials say weaker results in January have caused state tax collections for the first seven months of the fiscal year to lag 1 percent behind original estimates.

Figures released Wednesday show collections of $393 million for the state’s general revenue fund in January were $28.2 million, or 6.7 percent, short of estimates for the month and were 2 percent behind January 2017 collections.

Officials report lower-than-expected corporate, consumer sales and severance tax receipts last month offset higher collections of personal income taxes.

Still, actual collections through the first seven months of the fiscal year are 4.3 percent ahead of collections compared to the year-earlier period.

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