Offering few specifics or details, Gov. Jim Justice on Friday outlined plans for spending West Virginia’s $1.25 billion federal CARES Act appropriation, and said he has closed a $285 million shortfall in the state’s 2019-20 budget.
Justice had drawn criticism from Sen. Joe Manchin, D-W.Va., and others for sitting on the federal stimulus funds for two months, allocating only about $16 million in grants to cities and counties.
On Friday, Justice unveiled a plan that will direct a large chunk of the funds — $687 million — to replenish the state’s Unemployment Fund account, a fund that has been drained as coronavirus-related unemployment claims hit record levels.
Justice said that, without the stimulus money, the state would have had to make steep hikes in unemployment compensation taxes paid by employers to replenish the fund.
“This right here assures we’re not going to have to raise those taxes,” he said.
Other major pieces of the plan include $200 million for grants to city and county governments, $150 million for grants to 15,000 small businesses with 35 or fewer employees, and $100 million for “COVID-related highways projects.”
“We have absolutely vetted this from end-to-end,” he said of the plan, while addressing criticism that the West Virginia Legislature has been left out of the appropriation process.
“I believe the federal government’s directive is for me to administrator this,” he said of the CARES Act funds.
Justice said there are separate federal COVID-19 grants for Medicaid, child care, foster care, SNAP benefits and higher education and public education totaling more than $970 million.
Meanwhile, the governor said his administration will be able to sweep funds in reserve accounts and move Medicaid matching funds to close a $285 million shortfall in the 2019-20 state budget when the fiscal year ends Tuesday. Those moves, Justice said, will mean the state will finish the budget year with a roughly $10 million surplus.
“We’re going to have plenty of cash to go out to the end of the year, no problem whatsoever,” the governor said.
Under the West Virginia Constitution, the state cannot end a budget year with a deficit.
Justice said initial dire warnings of a budget deficit in excess of $500 million were avoided, in part, because many businesses and industries remained open at the height of state-ordered shutdowns and stay-at-home orders.
“You see, West Virginia, you never really closed, and the economic numbers have continued to be better than we thought,” he said.
In his first COVID-19 briefing since the forced resignation Wednesday of state public health officer Dr. Cathy Slemp, Justice made only limited comments about her ouster.
“I had lost confidence. There’s no point in belaboring that,” said Justice, who, on Wednesday, went on a tirade over erroneous figures on the Department of Health and Human Resources’ coronavirus website dashboard that resulted in the over-reporting of active COVID-19 cases by about 90 statewide.
“We’re sending out news that is completely the opposite of the good news we want to be sending out,” he said of the erroneous figures.
As for a replacement for Slemp, who spent 17 years at the DHHR and is a nationally recognized public health consultant, Justice said, “We’ll be filling that position ASAP. It will not be long at all.”
He indicated that one candidate for the position had been interviewed on Thursday.