Hoping Revenue Shows Rebound
Within a few days, state officials will make public information on how much money West Virginia state government collected in August. Keep your fingers crossed, especially if you want to see more potholes patched.
Revenue in July, the first month of the new fiscal year, was far below what had been projected. Collections for the state general fund were nearly $33 million less than the $317.6 million estimate.
It was even worse for the smaller, yet critical, state road fund. Planners had expected that account would receive $157.5 million in July. The actual total was just $102 million.
What makes the numbers so unsettling is that revenue estimates are used by legislators and Gov. Jim Justice to write fiscal-year budgets. We all know what happens when collections dip below budgeted amounts: Mid-year spending cuts and raids on the “Rainy Day” emergency fund are used to keep the budget in balance.
Spending, including new outlays that are part of this year’s budget, is up substantially. Hefty revenue surpluses last year allowed Justice and lawmakers to adjust the general fund budget, adding more than half a billion dollars to the initial spending plan. This year’s fiscal blueprint, at $4.71 billion will have to cover even more new spending, including that to cover pay raises for school employees and other facets of the education improvement bill passed earlier this year.
Another uncertainty is just how much front-loaded spending is occurring from the state road fund. Using a substantial part of the fiscal 2020 budget on road and bridge repairs now may please voters looking toward next year’s elections — but will the highways accounts contain enough for a meaningful summer repair program nine months from now?
Perhaps July was a one-time dip for both the general revenue and state road funds. We hope so.
But if August revenue continues to fall below projections, Justice and, perhaps, legislators may have to begin considering where they can save money later in the year.
Keep ’em crossed…