An editorial from The Exponent Telegram
CLARKSBURG, W.Va. — With a $430 million budget gap pending in the 2016-17 state budget, lawmakers must adjust spending to match the new realities of West Virginia’s declining economy and what appears to be a permanent loss of once-dependable revenue streams.
The shortfalls are in many tax categories, including severance, personal income and sales.
Much of the state’s budget troubles are tied to a coal industry that’s struggling and an oil and natural gas industry that’s seen prices plummet because of a supply glut. Coal severance tax collections are running 30 percent behind last year’s; natural gas severance tax collections are down more than 40 percent, while oil’s are down 50 percent.
Up to this point, Gov. Earl Ray Tomblin has proven to be a fiscal conservative who has effectively managed state budget shortfalls through across-the-board spending cuts and responsible use of the rainy-day fund.
This fiscal year, Tomblin implemented midyear budget cuts of 4 percent and continued a hiring freeze that’s been in place for more than a year to try to offset the increasing revenue shortfalls.
He has also built an additional 4 percent across-the-board spending cut into his budget plan for next fiscal year; for most agencies, that will follow two consecutive years of 7.5 percent spending reductions.
However, many state Republican leaders fear that the revenue losses will continue and that additional mid-year cuts will be required…