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Watch W.Va. Budget Closely

Gov. Jim Justice offered a late Christmas gift to West Virginians last week, telling us state revenue collections were good during December. He and state legislators need to bear in mind that we are not out of the woods, yet, however.

Going into the sixth month of the fiscal year, the state’s $4.7 billion general revenue budget was out of balance by more than $40 million. That is, actual collections were that much below projections on which the budget was based.

But Justice reported a modest turnaround in December. For that month, collections exceeded what was budgeted by $6.9 million, the governor noted. That leaves total revenue for fiscal 2020’s first half $33.4 million below expectations.

For several weeks before 2019 ended, some in the Justice administration talked of a $100 million spending cut to ensure the budget remains in balance until the end of the fiscal year on June 30. But the governor held off on that and, last week, was optimistic. He called December collections “really phenomenal.”

They were not, of course. To his credit, Justice said that although the state is “in great financial health,” officials “are always looking at all of our numbers …”

Cautious optimism seems merited. Some key budget line items performed well in December. Severance tax receipts were about $100,000 above projections.

But other critical numbers were not as good. Personal income tax receipts are $33.6 million below the budgeted figure. Consumer sales tax revenue is $2.8 million under projections. In other words, this is not an occasion for a cork-popping celebration.

Unless a sharp upturn in revenue is evident during the next couple of months, Justice should continue to consider ordering a spending cut. With half the fiscal year remaining, there is plenty of time for the budget to become a serious problem.

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