Being Prepared For a Downturn
West Virginia House of Delegates member Patrick McGeehan is firmly in favor of improving public schools. But McGeehan, R-Hancock, voted against a bill to that end for an understandable reason — cost.
“We seem to have short memories in Charleston,” McGeehan told our reporter. “In this bill there is close to $200 million annually in ongoing expenditures, and the surpluses we are seeing now are unsustainable,” he explained.
He makes a valid point.
We supported the bill, which was signed into law last month by Gov. Jim Justice. We remain in favor of it for the simple reason that it appears to be a true investment in improving public schools.
What results the measure will accomplish remain to be seen — but clearly, dramatic action on education is long overdue.
Still, even the most desirable expenditures have to be covered by money in the bank, and McGeehan is right to worry about that.
State government spending has exploded this year, on the strength of better-than-expected revenue collections. Last year at this time, the fiscal 2019 general revenue budget called for $4.439 billion in spending. But by the end of the year on June 30, that had been revised upward by $309 million, to a total of $4.748 billion — which is more than the $4.635 billion budget approved for the current year.
In other words, the state already was spending at a rate in excess of what is called for by the fiscal 2020 budget — without including new expenditures resulting from the education bill.
If revenue continues to increase at the rate it did during the second half of fiscal 2019, that should be no trouble. If it does not, Justice and lawmakers could be in big trouble — and there are signs a slowdown in the economy may be on the horizon. That is what McGeehan meant by unsustainable surpluses.
Perhaps the enthusiasm so often displayed by the governor is well-founded. Let us hope so. But at the same time, Justice and legislators should be thinking about what they will do if revenue collections do not continue expanding. Prudence dictates having a plan in place for that unpleasant possibility.