CHARLESTON, W.Va. — Gov. Earl Ray Tomblin’s 2016 budget will use targeted cuts and money from West Virginia’s Rainy Day Fund to fill a projected $195 million gap in revenue, a top state finance official said Monday.
Cabinet Secretary Bob Kiss of the West Virginia Department of Revenue spoke Monday to journalists during the West Virginia Associated Press Legislative Lookahead.
Kiss provided an overview of the state’s recent financial history and touched on Tomblin’s proposed Fiscal Year 2016 budget, which will be presented Wednesday during the governor’s State-of-the-State address. Kiss declined to give many specifics ahead of the governor’s presentation, but said the proposed budget would not use the across-the-board cuts employed the two previous years.
Kiss said because funding for many programs and agencies are part of state and federal code, those across-the-board cuts only affect about 25 percent of the budget and those agencies have been forced to significantly cut their budgets to make up for the state’s declining revenue.
Kiss said the drop in revenue is due to multiple factors. The largest factor, he said, has been a major drop in severance taxes due to low energy prices.
“We have been surprised by the precipitous decline in oil and gas prices,” he said.
Revenue from coal has been declining for years, a trend expected to continue, he said.
The state also has lost Medicaid reimbursement funds in recent years, ironically due to the state’s improving economy, Kiss said.
Kiss declined to say how much money would come from the Rainy Day fund, but said it would likely be “less than $85 million,” which was a number given to rating agencies by the state.
Republican leaders have voiced opposition to any plan involving the Rainy Day Fund. Last year Tomblin used $100 million from the fund to balance the FY2015 budget.
“I think it is going to be extremely difficult to put together a 2016 budget without accessing the Rainy Day Fund at all,” Kiss said. “Could you do it? Theoretically yes. But what are you going to cut?”
Kiss said the governor remains open to discussion and finding the best way to close the funding gap.
“I think the administration is certainly willing to work with them,” Kiss said. “How you are going to do it becomes the key issue.”
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