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Conserve ‘Rainy Day’ Cash in W.Va.

A bit of fiscal flattery was handed out to West Virginia this week. The Pew Charitable Trusts reported ours is one of just six states with reserve or “Rainy Day” funds sufficient to keep state government operating for more than 100 days without other revenue.

That’s nice. But it is less a statement of success here than a dismal picture of government finances in other states.

Pew analysts found that West Virginia’s Rainy Day Fund, containing $682 million, could cover general revenue budget operations for 111 days. Ohio, in comparison, can handle just 37 days, according to Pew (other states surpassing the 100-day mark were North Dakota, Wyoming, Nebraska, Texas and Alaska).

Our problem here is that the general fund budget is a wreck. Before the fiscal year ends next June 30, it is expected to be about $350 million out of balance. That hole will have to be closed.

Rainy Day money was supposed to be reserved for use in meeting unexpected needs such as recovery from disasters. Just a few days ago, state legislators agreed to use $55 million for expenses related to flash floods this summer.

That will reduce the Rainy Day Fund to $627 million. Just two years ago, it stood at $839 million.

Earlier in the summer, lawmakers agreed to use $70 million in Rainy Day Funds for this year’s budget.

At that rate, the money will not last long.

Some state officials already are thinking about how to close that $350 million budget hole. Use of more Rainy Day cash should be among their last resorts — because there is no reason to believe the fiscal drought plaguing state government will do anything but become worse.

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