CHARLESTON, W.Va. — The chief of staff for Governor Earl Ray Tomblin’s administration says mid-year budget reductions or budget freezes are “likely” if the state’s revenue collections continue to come in below projections.
“Being fiscally responsible and not raising taxes, there’s one major way to go and that is to limit expenditures and adjust appropriations so that they match the actual revenues received,” said Charles Lorensen of the possibility.
Lorensen, a former secretary of the state Department of Revenue, talked about the budget numbers on Tuesday’s MetroNews “Talkline.”
“We’re probably about four percent below what we projected and, if we can ascertain that’s a trend or if that’s something that’s going to stick for the remainder of the year and can’t be made up, then we’re faced with dealing with it,” he said.
Since the start of the new budget year in July, state revenue officials said the state has collected $57 million less, from taxes, than expected. Much of that shortfall was attributed to declines in personal income tax collections.
Overall, budget analysts have said declines in severance tax and personal income tax collections, rising Medicaid costs and ballooning tax credits, like those previously given for flex fuel vehicle purchases, are all contributing to the long-term budget shortfalls that, they said, will continue.
State agencies have already been asked to submit budget proposals for the 2014-2015 fiscal year that include 7.5 percent reductions from the current year’s spending and Lorensen said those cuts will most likely be implemented beginning in July.
“We’re fiscally responsible and we’ll have a balanced budget,” he said.
Public education, corrections, Medicaid and others have been exempted from the cuts in the coming year.
Lawmakers will be working on the new budget during the 2014 Regular Legislative Session which will open at the State Capitol on Jan. 8.