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CHARLESTON - The latest report from a national group who evaluates the financial health of states gives West Virginia high marks for having enough money to pay its outstanding bills for fiscal year 2025 while raising concerns about federal compliance under the previous administration.
Truth in Accounting, a national organization founded in 2002 to look at state and federal fiscal data, gave West Virginia a B in its annual Financial State of the States report for the fourth year in a row.
The report looked at West Virginia’s audited Annual Comprehensive Financial Report and its retirement systems' reports for fiscal year 2025 - from July 1, 2024, through June 30, 2025 - which included the last half of former Gov. Jim Justice’s final year in office and the first half of Gov. Patrick Morrisey’s first year.
According to the report, the state’s total assets for FY25 were $37.9 billion. Subtracting capital and restricted assets left West Virginia with $14.8 billion in assets. Subtracting $11.8 billion in total bills, that left more than $3 billion at the end of FY25, or $5,800 per taxpayer.
"In 2025, West Virginia's financial situation improved," the report states. "West Virginia had more than enough money to pay its outstanding bills and received a ‘B’ grade for its finances."
The state’s total bills for FY25 included $5.8 billion in bond payments, nearly $8 billion in other liabilities with $2.7 billion subtracted for debt related to capital assets. The state also had $539.2 million in unfunded pension benefits and $84.2 million in unfunded retiree healthcare benefits.
"Unfunded pension liabilities declined due to strong investment returns exceeding 11%, increasing assets available to pay benefits," according to the report. "In contrast, retiree health care shifted from fully funded to underfunded, primarily due to updated assumptions that increased estimates of future benefit costs."
West Virginia ended FY25 with $5.5 billion in collections for the state’s general revenue fund, or 4.8% more than the $5.2 billion estimate set by the Department of Revenue. This gave the state $254.8 million more than projected. The state also ended FY25 with $594 million in the Income Tax Refund Reserve Fund and $1.3 billion between the state’s two revenue shortfall reserve funds, also called the Rainy Day Fund.
The report’s authors said the state budget was buoyed that fiscal year by substantial funding through federal sources, such as the American Rescue Plan Act and the Inflation Reduction Act. The state also began paying debt service on bonds from the Roads to Prosperity Amendment adopted by voters in 2017, allowing for the issuance of bonds not to exceed $1.6 billion to improve major roads and bridges as well as new road construction.
"West Virginia reported revenues exceeding expenses, supported by historically high federal grants," the report states. "Additional resources were invested in infrastructure, improving services to citizens but limiting funds available for other obligations."
The report’s authors pointed out West Virginia received approximately $9.7 billion in federal grants, making up 40% of the state’s total revenue in FY25. As a result, the state was required to undergo a Single Audit, where federal officials look at all grants.
"These audits are intended to be the taxpayers' first line of defense against potential fraud and abuse," the report explained. "Auditors repeatedly found problems with financial oversight, late federal reports, missing documentation, and inadequate reviews that allowed errors to go unnoticed until the audit. Some previously identified problems also remained unresolved, making it harder to ensure federal funds and programs were properly managed."
The state’s FY25 Annual Comprehensive Financial Report was prepared by the West Virginia Finance Division within the state Department of Administration. The Governor’s Office declined to comment for this story.