CHARLESTON West Virginia's revenue collections now narrowly exceed projections, leaving incoming state leaders with limited financial flexibility as they prepare to take office.
State revenue collections are five million dollars ahead of projections, with $2.1 billion collected since the fiscal year began in July. This leaves little margin for the $5.26 billion revenue estimate for the full fiscal year ending June 30.
Acting Revenue Secretary Larry Pack described the figures as meeting expectations. He said the state is on track to meet revenue estimates despite the impact of personal income tax cuts, including a 21.25% reduction and additional cuts starting in January.
Governor-elect Patrick Morrisey has said his focus is on government efficiency as he prepares to take office on January 13. With state workers expressing concerns about rising health insurance costs, Morrisey and the Legislature, which convenes February 12, may face pressure for additional spending.
In November, state revenue exceeded estimates by $18 million, but overall collections remain lower compared to last year. For instance, November 2023 revenues exceeded estimates by $44 million, with year-to-date collections $286.2 million ahead at this point last year.
Ongoing financial commitments include implementing the Third Grade Success Act and covering increased Hope Scholarship enrollment. Expansion of the program could cost an additional $150 million to $200 million annually by 2026 or 2027.
Some officials remain optimistic about the tax cuts’ potential for economic growth, while others warn of challenges. Kelly Allen, of the West Virginia Center on Budget & Policy, expressed concerns over lower revenue and the state’s ability to address critical needs, such as public education and health insurance.
Outgoing Senate President Craig Blair acknowledged flat revenue trends and suggested potential solutions, including privatizing health insurance for state employees and providing equivalent pay increases. However, addressing long-term costs for the Public Employees Insurance Agency will be among the incoming administration’s challenges.
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