Be Realistic In Budgeting
State officials found out last week they may have chosen to see a glass half full when it was really closer to empty. According to Deputy Revenue Secretary Mark Muchow, West Virginia’s economy will need to grow by approximately 4 percent in the 2014-15 year in order to balance the budget.
But during the first month of the new budget year, revenue collections came in more than $17 million below projections. Sales tax collections were approximately $1.4 million below estimates, income taxes were $11 million below estimates, and severance tax collections were nearly $1.2 million in the red last month. In fact, severance taxes are projected to be down approximately $14 million from 2013-14 collections, because growth in natural gas production has failed to offset declines in coal production.
Revenue Secretary Bob Kiss explained that, in addition to reduced severance-tax collection, the hits to coal have affected income- and sales-tax collection, as coal-related jobs disappear.
Kiss also pointed out the significant drop in revenue collected from West Virginia’s four racetrack casinos, as competition from new casinos in neighboring states takes its toll.
“We’re not seeing the turnaround we were hoping to see earlier rather than later,” Kiss said in discussing the stalled growth of the state’s economy.
In fact, it is beginning to look as though there were a great many crossed fingers during hashing out of the state’s budget earlier this year. And officials would be playing a dangerous game with residents’ money if they failed to understand the “later” to which Kiss referred might be more along the lines of “someday.”
Even government offices are feeling the pinch, as a hiring freeze implemented last month is meant to reduce state payroll costs by $33 million over the next six months.
Time and again, legislators hung false hopes on the next big thing – video poker, table gaming, an impending natural gas boom, which promises always seem to be just around the corner. And time and again they have failed to recognize the negative implications of such hopes and wishes. That needs to change if West Virginians are to base our future on reality rather than false hopes.