Don’t Wait Too Long on Budget
Let’s hope West Virginia’s economy picks up, as some analysts expect. That would mean more revenue flowing into state coffers, something needed badly to avoid yet more cutbacks in state services.
About 3,000 new jobs were created in the state last year, and the trend should continue, according to a West Virginia University economic forecast.
Employment gains should average about 1 percent a year during the next five years, WVU Bureau of Business and Economic Research director John Deskins said this week. That should provide more revenue for the state – but the question Gov. Earl Ray Tomblin and legislators need to answer is whether it will be enough.
Also this week, it was revealed state tax collections declined again in September, for the fifth consecutive month. During the first quarter of the fiscal year, which began July 1, revenue was $34 million below estimates used to build the state budget.
Unless revenue for the remainder of the year grows at a 2.8 percent rate, the state budget will remain out of balance. That could force a mid-year spending cut order of the type Tomblin already has had to use once.
The state’s general fund budget has remained flat, with virtually no growth, during the past three years. Unexpected declines in revenue, such as those involving coal severance taxes, have made it difficult to maintain even a hold-the-line spending stance, however.
Again, let’s hope the economy grows, pumping more money into the state Treasury. But Tomblin and lawmakers cannot wait long to decide whether another round of mid-year cuts are necessary. The longer they are postponed, the deeper they will have to be to get spending back in balance with revenue by next June 30. No later than the end of this calendar year, then, the governor and legislative leaders should be prepared to cut spending if revenue has not rebounded.