During a press conference about a possible $400 million shortfall in the state budget, Gov. Patrick Morrisey said he won’t raise taxes. In fact, he intends to continue cutting them.
Part of that $400 million hole includes the state having to come up with $153 million to cover Medicaid, a program that ensures access to doctors, hospitals and life-saving treatment for nearly one-third of all West Virginians.
But the state has $400 million set aside in a special fund to cover shortfalls – and another $1.3 billion in the Rainy Day Fund.
Morrisey said he doesn’t want to use that money.
“I’m not planning to use the emergency fund. We’re going to make the tough decisions, the correct decisions, to put the people first, to put the next generation of West Virginians first,” Morrisey said.
So that leaves cuts. But the cuts could result in dialing back programs for some of the state’s most vulnerable citizens, Sean O’Leary, an analyst with the West Virginia Center on Budget and Policy noted.
“Everything from schools to parks to infrastructure, all of that stuff is at risk – healthcare, particularly for low income individuals,” he said.
While Morrisey took his predecessor Gov. Jim Justice’s practice of using a whiteboard to discuss the state’s finances, he laid much of the blame at the now-Senator’s feet. He said years of relying on an influx of federal dollars due to COVID, low-balled estimates on the cost of doing business, and using “one shot money” to fund programs, has put the state coffers in this position.
Back in 2023, when the Legislature passed a 21.25% tax cut, it also set aside $400 million into the Personal Income Tax Reserve Fund. This fund makes sure the state has cash on hand to pay out refunds when tax season comes.
Anything over and above that – like the $400 million the Legislature approved – can be used in the state budget.
Justice touted that money as a safety measure in case tax cuts caused the state revenue to run too lean.
But Morrisey said using that money would just delay fixing the problem for the next three or four years.
“I want to be clear, there is one time money available, that’s true, but I’m talking about fixing structural problems, right?” he said. “If you have continuous programs that go on and on, at least based upon the current law, you want to start to wean yourself off from over reliance on one-shot revenue.”
O’Leary is largely in agreement with the governor on this point.
“You can’t use one time fixes for a structural deficit, because they just reappear the next year,” he said.
Morrisey has not yet identified where he will make up the shortfall. The Governor will submit his first budget to the Legislature on Feb. 12, when he delivers his State of the State Address.