If you've been following the West Virginia budget news lately, you may be expecting a period of austerity in state government. Don't hold your breath.
State spending is about to explode. Gov. Earl Ray Tomblin's office forecasts an increase of about 14.5 percent during the two years from the 2013 fiscal year to FY 2015. That's more than $1.5 billion.
Without going into details, Tomblin hinted at the future during his State of the State speech Wednesday. Facing a revenue shortfall of between $66 million and $81.5 million for the first six months of this fiscal year, Tomblin has ordered a hiring freeze and a spending cut in efforts to avoid a deficit by the end of the year on June 30.
But he wants to spend more next year than originally was planned for this one. Tomblin proposes a 2 percent pay raise for public school personnel, plus a $504-per-year boost for other state workers. The increases would cost about $42 million next year.
At least that, probably more, will be needed to fund the raises every year in the future.
Some people are under the impression state spending is the general fund budget, which has hovered around $4 billion for the past few years. But there is much more in other accounts.
Total state spending for the fiscal year (2013) that ended last June 30 was about $10.5 billion. Appropriations for the current fiscal year (2014) total about $11.5 billion. During the year that begins this July 1, Tomblin's office forecasts nearly $12.1 billion in spending.
Most of the growth is being fed by federal dollars. During FY 2013, Charleston raked in about $3.5 billion from Washington. That is up to $4.1 billion this year and will increase to nearly $5 billion in FY 2015. The bulk of that probably will go to fund the Medicaid program, expanded as a result of Obamacare.
But the governor's budget forecasts rely on growth in state revenue, too. It just isn't there.
Again, the state is $66 million behind what was budgeted for just the first six months of this fiscal year. If things are going to get better, I really wish they'd hurry up.
Tomblin apparently doesn't expect a quick turnaround. Balancing his FY 2015 budget will require taking $84 million out of the "rainy day" fund (actually, two separate accounts).
West Virginia has built up a $918 million rainy day fund that is the envy of many other states. The money is supposed to be used only for emergencies, with emphasis on natural disasters. Now the governor wants to dip into it to avoid more spending cuts (most state agencies have been told to build 7.5 percent reductions in for next year) and to fund public employee pay raises.
One way or another, the cost of state government is ballooning - again, mostly because of federal funding. Let's hope presidents and members of Congress in future years don't decide to hang us out to dry.
Who are the winners and losers in Tomblin's budget? A sampling:
- The Department of Health and Human Resources, already the biggest spender of state dollars, gets even larger. FY 2013 spending for the agency was $4.17 billion. By next year it will spend $4.95 billion.
- Education remains the second-largest appropriation, going from $2.45 billion in FY 2013 to $2.55 billion next year. Just so the decimal points don't throw you off, keep in mind they translate to a $100 million increase in two years.
- Highways and bridges don't fare well. Transportation spending for FY 2013 totaled about $1.15 billion. Appropriations for 2015 are expected to be about $1.22 billion - a flat line, if increases in the cost of materials are taken into account.
- Perhaps the biggest loser is higher education, for which $587.8 million was spent in FY 2013. Tomblin's budget includes just $521.2 million for state colleges and universities next year.
- At least the governor plans to do his part to save money. In FY 2013, $132.3 million was spent on the executive branch of government. For next year, Tomblin is seeking just $89.7 million. That's a cut of about one-third.
Myer can be reached at email@example.com.