Revenue Report Is Worrisome
Gov. Jim Justice continues to radiate confidence about state government fiscal affairs, but West Virginia legislators would be wise to tap the brakes on new spending initiatives.
That may be a factor within the next few weeks, when lawmakers hold a special session to discuss improving public schools.
State government revenue figures for March were released last week. They indicate a distinct slowdown in growth that seemed to promise great things last summer and fall.
First glances at the March numbers can be a bit deceiving. Up until that month, reports had been based on general revenue fund income totaling $4.581 billion for the current fiscal year. But excellent numbers in previous months prompted Justice and legislators to add spending for fiscal 2019, taking the total general revenue estimate up to $4.607 billion — an increase of about $25.9 million.
With that change, income by the end of March remained $49.2 million above estimates for the first nine months of the fiscal year. But March revenue itself was nearly $3.8 million below estimates. And for the year to date, one key indicator — personal income tax receipts — was $10.5 million under expectations for the first nine months.
Justice blamed some of the slowdown on winter weather that affected construction activity in the state. That may have played a part — but wintertime construction always lags behind that of other months.
If this year’s performance is an indication, making the fiscal 2020 budget balance may be a challenge. Legislators and Justice agreed on a $4.635 billion general revenue spending plan for next year.
All this may be particularly worrisome for state officials going into the special session. Some additional spending they envision, including a pay raise for school employees, already has been built into next year’s budget. Lawmakers are expected to approve the raises during their special session.
But other aspects of education improvement, such as increased funding for small county school systems, could be problematic.
It has been said the special session will not be held until May. Good. That would give the governor and lawmakers another month of revenue reports against which to measure any plans for new spending. If April’s numbers are not good, they should be leery of adding to the general revenue budget they approved this winter.