West Virginia Gov. Earl Ray Tomblin ordered state agencies Tuesday to cut their spending by another 2 percent, a move expected to save $59.8 million.
Tomblin said the mid-year across-the-board cuts are needed to help make up for an $87 million shortfall in the state’s general revenue fund.
“This was a tough decision that stemmed from sustained budgetary challenges, but we must continue acting responsibly and taking the necessary steps to keep our state strong,” Tomblin said. “While the cuts we’re enacting won’t be easy, we must ensure a balanced budget, long-term financial stability for West Virginia and smart decisions that allow for continuity of essential services for West Virginians.”
The spending cuts include an $11 million reduction to the state’s school aid formula, which funds K-12 schools. The state’s Medicaid program will be hit with a one-time $25 million cut.
What’s more, a state-agency hiring freeze will remain in effect, and nonessential travel by state employees will be restricted.
Tomblin also issued an executive order Tuesday that redirects $25 million in workers’ compensation debt-relief funds to the state’s general revenue account. Lawmakers passed a bill earlier this year that gave the governor the go-ahead to redirect the funds. Other dedicated revenue will continue to pay off the state’s workers’ compensation debt.
“We expect these budget trends to continue, so we will be looking at additional remedies as a new budget year approaches,” Tomblin said.
Tomblin said he spoke to legislative leaders before announcing the spending cuts Tuesday.
Senate President Bill Cole, who’s leaving office next year after an unsuccessful run for governor, said the mid-year budget cut is “unfortunate,” but not a surprise.
“Our state is deeply entrenched in, perhaps, the worst fiscal crisis in a generation, and these kinds of difficult decisions are necessary to ease some of the burden.” Cole said. “I applaud Gov. Earl Ray Tomblin for proactively addressing this issue head-on, and I am confident that passing a sound, strong budget will be a top priority for next year’s legislative leadership.”
House Speaker Tim Armstead said lawmakers expect to recommend additional spending cuts that aim to “right-size” state government.
“The governor’s cuts in spending underscore the need to streamline state government and rein in spending, while also promoting policies that foster economic growth,” Armstead said.
According to Tomblin’s office, mid-year personal income tax collections are down $29.8 million, consumer sales taxes by $35.2 million, corporate net income taxes by $14.2 million and severance taxes by $13.5 million.
Government agencies already have absorbed more than $400 million in Tomblin-ordered budget cuts over the past three years.
Reach Eric Eyre at email@example.com, 304-348-4869 or follow @ericeyre on Twitter.