West Virginia’s budget woes have been well documented. Governor Tomblin has reduced spending by $400 million over the last several years to keep the budget balanced, and multi-million dollar revenue shortfalls are forecast for the future.
But through it all, the West Virginia has done a remarkable job keeping up with payments to state pension funds. These retirement accounts often get neglected by leaders in some states when the money gets tight because the political fallout won’t occur until sometime in the future.
A new report by The Pew Charitable Trusts of all 50 states finds that the unfunded liability totaled $934 billion in 2014, the most recent year the figures are available. “Preliminary data from fiscal 2015 point to increases in unfunded liabilities for a majority of states,” Pew reports. “Total pension debt is expected to be over $1 trillion for state plans, an increase of more than 10 percent from 2014.”
However, West Virginia has emerged as one of the most disciplined states when it comes to keeping up on its payments.
“West Virginia stands apart as having made the most progress on pension funding, increasing its funded ratio from 40 percent to 78 percent from 2003 to 2014,” according to Pew. Additionally, West Virginia was one of just 15 states in 2014 that had a positive amortization schedule, meaning we’re on course to reach full funding of pension liabilities.
It’s worth noting that two neighboring states—Kentucky and Pennsylvania—were among the worst for keeping up with their payments in 2014, though Pennsylvania has since committed to large, steady increases to try to get back on track.
At 78 percent funded, West Virginia’s pensions are in better fiscal shape than 27 other states, including every surrounding state except Ohio. Even wealthy states like Connecticut, Colorado, Virginia and California trail West Virginia in this category.
Among those who should get credit for West Virginia’s good standing are Governor Tomblin and state Revenue Secretary Bob Kiss. When the two served together in the Legislature—Tomlin as Senate President and Kiss as House Speaker during the 1990’s—they took steps to solidify the pension funds, while moving the financially troubled workers comp system to the private sector.
Imagine if Tomblin, Kiss and others had ignored the pension issue. West Virginia’s current budget challenges due to the decline of the coal industry would be significantly worse. Instead, those obligated retirement programs are solid and improving every year.