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Potential week-long budget gap could leave WV in ‘uncharted territory


Charleston Gazette-Mail

CHARLESTON, W.Va. — Because both houses of the West Virginia Legislature lacked the votes to make it effective from passage, the budget bill passed by lawmakers Sunday would not go into effect until July 8 — leaving a week-long gap from the end of the 2016-17 budget year on June 30.

While it might be a moot point if Gov. Jim Justice announces Thursday that he will veto that budget plan (HB 2018), state officials are researching what would happen during that gap week.

Does state government shut down? Do paychecks go unissued and bills go unpaid?

“This mistake in the budget passed by the Legislature would make it impossible for state government to conduct certain financial transactions under the normal course of business,” Revenue Secretary Dave Hardy said Wednesday.

Meanwhile, state Auditor J.B. McCuskey said his attorneys and financial staff have been researching the issue and that he believes state law would allow the Auditor’s Office to issue paychecks to state employees and to make payments on bond issues.

“This is uncharted territory,” McCuskey said. “Provided there is sufficient funding in the agencies’ accounts, we will be able to make payroll in that interim period.”

The auditor said state employees are paid in arrears, meaning that paychecks issued on July 7 in the gap week are for work performed in June, under the current 2016-17 budget year.

“As long as we can find funding, there won’t be a problem with us making payroll,” he said.

McCuskey said it does not appear that the state could make payments to vendors during the gap week, but he said it is not uncommon for state agencies delay or “drag” payments, depending on availability of funds.

Since tax revenue does not come in at equal amounts each month, but ebbs and flows throughout the year, the state might drag payments in low-revenue months, particularly in the fourth quarter of the budget year, he said.

“If it were any longer than eight days, it would be a problem,” McCuskey said of the gap week’s implications for paying state vendors.

Under the state Constitution, bills take effect 90 days after their date of passage, unless the Legislature approves a different effective date by a two-thirds vote in each house. Neither house had the votes to either make the budget bill effective from passage or effective on July 1, when the new budget year begins.

The budget bill caps general revenue spending at $4.102 billion, the same amount as a Senate budget plan that Justice previously said he would veto “in a millisecond.”

Justice has scheduled a “major budget announcement” for 2 p.m. Thursday in the lower Rotunda of the Capitol. As of Wednesday evening, about 70 seats had been set up there, at the request of the Governor’s Office.

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