West Virginia state government agencies will soon receive from Governor Tomblin next fiscal year’s budget request instructions. Those agencies will respond by proposing to the Governor how they will spend nearly $4.4 billion in estimated collected tax money from the state’s General Revenue fund for fiscal year 2016, which begins next July.
The department heads will be relieved to learn that they will not be asked to cut spending across the board. For the last two budget cycles, Tomblin has directed most state agencies (excluding Public Education, Medicaid and Corrections) to reduce their proposed spending plans by 7.5 percent each year. (Higher Education’s budget cut for the current fiscal year was reduced to 3.75 percent.) Those cuts saved about $140 million.
But it’s not as though Tomblin is opening the state’s checkbook. The Governor’s directive tells agency heads to propose new spending only in rare cases, such as an absolute emergency. If agencies want to fund a new program, they’re being told to reallocate money within their department.
The Governor is required by law to submit a balanced budget to the Legislature to consider. That’s become increasingly more difficult in recent years because tax revenues have flattened out, while some costs—Medicaid in particular—have gone up.
This fiscal year, the state is dipping into its emergency savings account—the Rainy Day Fund—for $100 million to balance the budget. The Tomblin administration has no plans to take more out of Rainy Day for next fiscal year, but budget conditions sometimes change rapidly.
Balancing the budget won’t be easy, especially with the depressed coal market and the flat growth in personal and consumer tax collections. I’m told rather than across the board cuts, Tomblin wants to look at more structural changes within the budget. Are there services or programs the state can eliminate? Are there ways to provide some services in a more cost effective way?
Administration officials say Department of Health and Human Resources Secretary Karen Bowling has been out in front on this issue, looking for ways to economize. That’s a good place to start because DHHR gets nearly one out of every four General Revenue dollars.
At this stage, budget making is just a numbers process, matching up the amount of money the state expects to bring in between July 1, 2015 and June 30, 2016, with the projected expenses of operating the government.
The practice becomes more political, however, when the Legislature returns to Charleston in January. Lawmakers represent the citizens, who make up constituent groups, which have a vested interest in protecting or expanding government programs and services that are important to them.
It’s one thing to shift numbers around during budget preparations in August; it will be a more arduous and emotional process early next year when the Governor and lawmakers are trying to agree on the distribution of the state’s limited resources.