Four takeaways from West Virginia’s new budget

Every year, West Virginia lawmakers come to Charleston for their 60-day regular legislative session and pass hundreds of bills. This year, 280 made it across the finish line and will become law if Gov. Jim Justice signs them.

But every year, there’s only one bill they’re constitutionally required to pass: the state budget. This is the comprehensive document that lays out how the state plans to spend money over the course of the next year, and says a lot about what officials prioritize and what they don’t.

This year, it initially wasn’t clear if lawmakers would pass the budget before they adjourned at midnight on Saturday. A few days ago, Justice extended the deadline for passing the budget by a day, so legislators could have tackled it on Sunday. But before they gaveled out, the House and Senate came to an agreement on the budget.

Here are four takeaways from this year’s nearly $5 billion state budget.

How “flat” is the flat budget this year? For now it’s pretty close — at the expense of important social services.

When Gov. Justice prepared to release his FY 2025 budget earlier this year, he made sure to emphasize that it would, once again, be “flat” — meaning that there would be no increases in funding for state agencies, even to keep up with inflation.

This has been a regular practice under the Justice administration, and Republican legislative leadership has argued that flat budgets ensure that state agencies are running as efficiently as possible. That’s despite some agencies, like the Department of Corrections, the Public Employees Insurance Agency and various health agencies desperately needing more money in recent years to address urgent problems.

Even so, the governor’s proposed budget was actually slightly larger than what was passed last year. While the FY 2024 budget that took effect last July was roughly $4.884 billion, the governor proposed a $5.265 billion budget in January, a nearly 8% increase. This was largely to fit in new supplemental appropriations from the General Revenue Fund. The governor later proposed minor amendments to this budget during the session.

The modest proposed increase, which comes a year after the state cut the personal income tax by 21.25%, was enough to raise concerns from Senate Finance Chairman Eric Tarr, R-Putnam. Tarr argued that Justice’s proposal was still too large, and needed to be trimmed to avoid ballooning the budget in the future.

The Legislature agreed, passing a roughly $4.997 billion “compromise” budget for the upcoming year, a 2.3% change from the FY 2024 budget. The Legislature pulled or reduced funding for child welfare programs, assistance for adults and seniors with disabilities, and other social services like Medicaid from the governor’s proposal to make the numbers work, changes that will hurt some of the most vulnerable West Virginians.

It is possible that some of this funding will be restored in May, when some legislative leaders are  predicting a special session on budget issues.

Some decisions are punted, with the uncertainty of a $465 million clawback hanging overhead

As lawmakers were hammering out the budget, legislative leaders disclosed that the state could be forced to pay back $465 million to the federal government . This was COVID funding, and as part of receiving nearly $1 billion for schools, West Virginia officials agreed to keep its funding levels for education proportional to the general budget.

But in the 2023 budget year, the state fell short by $465 million, and the Governor’s Office is currently in negotiations with the federal government to get a waiver. West Virginia is not alone — about 10 states have also needed a waiver due to the same issue.

And so far, the federal government has not required any state to pay back the money. But while it’s still a possibility, House Finance Chairman Vernon Criss, R-Wood, said he wanted to pass a barebones budget that would leave out most of the more than $600 million the Governor had asked for in supplemental spending.

Once the status of the “clawback” is established, Criss said he hopes a special session will be called in May to add that back in. But House Democrats are skeptical, voicing concern about what could be left out in that special session – if one is actually called.

State workers will see a pay bump

An open question during the session was if lawmakers would give state workers a pay raise to help offset the rising cost of their insurance through the Public Employees Insurance Agency. In his budget, Justice proposed a 5% raise, but some legislators were doubtful the state could afford the increase. Lawmakers were also considering a different measure outside of the budget — HB 4883 — to give teachers, school service personnel and state troopers a 5% raise.

The teacher and state trooper bill underwent changes in the Senate, where lawmakers lowered the raise to 4% and made it contingent on the state revenue. On the final night, the bill that emerged included the 5% raise, and the state budget included a 5% raise for employees who are paid through those general revenue funds. Non-uniformed corrections employees weren’t so lucky; while a bill to raise the salaries of jail employees like counselors, case workers and secretaries passed the House, the Senate Finance Committee never took up the bill.

Targeted increases, cuts for health funding

Prior to the session, officials from the three newly-created state health departments asked the governor’s office to propose a budget with a nearly $300 million increase —  25% over the previous year — for programs with urgent needs. The governor normally touts a tight budget, but his budget proposal included many of their requests .

In the final budget bill , lawmakers also granted increases in areas they said were priorities, including funds for the bogged-down Office of the Chief Medical Examiner and to afford the highly-paid contract nurses at state-owned psychiatric hospitals. Those hospitals are crowded in large part because courts are increasingly committing people with developmental disabilities like cerebral palsy, low IQ and autism; while the budget included money for contract nurses, it didn’t include advocates’ requests for pay raises for workers who help people live independently in communities.

Neither the governor’s proposal nor lawmakers’ budget included requested increases that health officials had said they urgently needed to hire more workers to reduce child abuse referral backlogs, or the increase they said they needed for public health departments to prevent and respond to disease outbreaks.

Four takeaways from West Virginia’s new budget appeared first on Mountain State Spotlight , West Virginia's civic newsroom.