CHARLESTON, W.Va. — The House Finance Committee chairman says he met with representatives of the Justice administration to talk about “sweeping” agency accounts the day before Gov. Jim Justice chastised lawmakers for not coming up with the idea.
“The prior day I had had a direct meeting with the chief of staff, as well as the Secretary of Revenue and we talked about this very issue,” House Finance Chairman Eric Nelson (R-Kanawha) said during an interview in his office Monday.
“For the governor to come out the next day and basically say it’s his idea and point fingers at a Republican Legislature, I think was completely wrong.”
During an appearance Friday on MetroNews’ Talkline, Justice announced his support for using about $60 million from special revenue accounts and about $60 million in reappropriated funds to close the current fiscal year’s gap of about $123 million.
In that radio appearance and in a release distributed later, Justice took credit for discovering the financial strategy and wondered why the Legislature hadn’t done so earlier.
“Powerful people in positions of responsibility kept kicking the can down the road and the budget they passed last year has left our state upside down by $123 million,” Justice stated in the release.
“The Legislature has had years to sweep accounts and get a handle on our budget. In six weeks I’ve uncovered money to prevent another massive raid on the Rainy Day fund. On the campaign trail I promised I’d do a thorough top-to-bottom review of state government, and I’m doing it every day to fix this budget crisis.”
Justice added, “This makes perfect business sense, and I’m not sure why it wasn’t done years ago. If we keep using Rainy Day money without a plan for the future, West Virginia’s bond rating will continue to deteriorate.”
House leadership on Friday responded that last year, the House passed bills to sweep more than $83 million from some $389 million in agency accounts to help close the budget, though the bills were significantly pared down or did not become law.
Additional sweeps were proposed during the special session, but the executive branch pushed back against those proposals, House leaders recalled Friday, claiming the sweeps would cripple their ongoing operations. That was in the wake of then-Gov. Earl Ray Tomblin imposing across-the-board cuts for agencies, so some were using reserves for day-to-day operations.
“The last two years there’s been tremendous effort by both finance committees led by myself and (Senate Finance Committee Chairman Mike) Hall to look at our cash balances and reappropriate it in special revenue accounts. This is nothing new,” Nelson said.
“I applaud our governor for looking at this. But I am extremely disappointed that he wants to bring politics into play and say we have not been working for this. That’s uncalled for and in the end doesn’t help us get to the solution of helping the citizens of West Virginia and our serious budget constraint that we’re in.”
During a stop in Nitro to promote his “Save Our State” agenda, Justice on Monday again discussed sweeping reserves. He expressed dismay that the state is coping with a fiscal gap for the current fiscal year and the coming fiscal year.
“I would have surely thought that the budget that I inherited would at least be balanced between now and July, and it’s $123 million upside down,” Justice said in Nitro.
“Now we’ve forensically cleansed all the departments and we’ve looked in every place, every single spot. And we found a bunch of money, to tell you the truth, that was hidden away and not used, and we’ve got to use that to clean up the mess that’s right in front of us today. It’ll enable us to do that without raiding the Rainy Day Fund.”
On Monday morning’s edition of “Talkline,” House Speaker Tim Armstead pointed out the bill that was passed last year to use agency reserves to close the fiscal gap.
“If he’d done his homework he could have seen that we actually did it. We did $83 million in last year’s budget, and it got pared down in the Senate and it didn’t go anywhere with Gov. Tomblin. This is something we’ve been trying to do for years,” said Armstead (R-Kanawha).
Armstead said the funds are set apart from the state’s general fund and are generally the result of fees imposed by agencies. He cautioned that some could be constitutionally-mandated or subject to federal matching money.
“We need to look at these. I haven’t even seen which ones he’s proposing,” Armstead said.
Another source of the money Justice is looking at is reappropriated funds — money that hasn’t been spent from the prior year. Armstead said that money can prove useful for agencies. He said, for example, the Legislature has been using reappropriated funds to lower its overall budget needs.
“In some cases, you’ve got to look at what it’s being spent for,” Armstead said. “But some of these agencies feel like they’ve got to spend whatever money at the end of the fiscal year may be there so it doesn’t get recaptured.”
Armstead said legislators would like more detail about which agencies Justice is eyeing for reappropriated funds.
“You’ve got to make sure you are not taking where you have to come back and do a supplemental budget to fund an agency because they took money that they couldn’t give up,” Armstead said.
“We’re with him in terms of not having to use Rainy Day. Certainly to use these funds that are squirreled away, we need to know which ones he’s talking about.”
Armstead said he and other House members were irritated by Justice’s approach.
“What I am upset about is when he attacks the hard-working members of the House and Senate, and he goes off and calls them names and says, ‘Oh, here’s an idea. You should have thought of this.’
“Even in his press release, he says this is because we passed a budget that didn’t fully fund this year. We passed a budget that matched Gov. Tomblin’s revenue estimates. The governor has to set those revenue estimates.”
On the Senate side, President Mitch Carmichael and Majority Leader Ryan Ferns issued a joint statement late Friday saying they were pleased Justice wants to use cash reserves to fill the gap but that the governor went a step too far with his criticism of the Legislature.
“We appreciate that Governor Justice has embraced the previously announced Republican initiative that will utilize funds that are currently stashed away within the executive branch of government to balance this year’s budget.
“Today, the governor made a claim that in just six weeks he’s ‘uncovered’ $120 million, as if these funds were hidden in a sock drawer. Nothing could be further from reality. In fact, this money isn’t hidden. There’s nothing secret about it. The very amounts of money in these accounts are under the governor’s purview.”