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Mid-Year Budget Cuts Possible for W.Va.

Hiring freeze also considered to offset low revenue

December 5, 2013
The Intelligencer / Wheeling News-Register

CHARLESTON (AP) - Gov. Earl Ray Tomblin's administration is considering mid-year budget cuts to offset a decline in state revenues.

The November revenue report released Tuesday shows tax collections were about $57.4 million below estimates for the fiscal year that began July 1. A majority of the decline was due to personal income tax collections, which were $37 million below estimates for the period.

Tomblin chief of staff Charlie Lorensen said the state could impose cuts or a hiring freeze to balance the budget.

Article Photos

Photo by Joselyn King
West Virginia Gov. Earl Ray Tomblin addresses the annual Project BEST holiday breakfast Wednesday at Oglebay Park’s Glessner Auditorium.

Another option is to use funds in accounts set up by the Legislature. But the governor's office would need legislative approval to do so, he said.

"We'll take corrective action," Lorensen said. "It'll be painful, but it'll bear fruit."

The report shows November tax collections were $14.9 million below estimates. Deputy revenue secretary Mark Muchow told media outlets that coal and gas severance taxes accounted for most of the shortfall.

Muchow expects severance taxes to rebound in December. He said the state collected nearly $28 million in severance tax payments on Monday and Tuesday, which will reduce the state's year-to-date deficit to "the mid-40s range."

However, he said, "We still have yet to have a month this fiscal year where we exceeded estimates."

Tax collections must grow by 3.6 percent for the the fiscal year in order to avoid a budget shortfall, he said. While this is possible, the improvement would need to occur soon, Muchow said.

"The longer we wait, it makes that cliff a little bit harder to climb," he said.

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