When you look at your paycheck or your W-2 forms, you know exactly how much you pay to the State of West Virginia in income taxes, and you probably notice sales tax amounts when you buy a larger item.

But collectively, how much money flows from us to the state treasury annually and where does all that money go?  A closer look at the breakout of Governor Jim Justice’s proposed budget for next fiscal year gives us some insight.*

First, the state expects to collect $4,356,170,000.00 (Nearly $4.4 billion) in various state taxes that make up the General Revenue Fund that the Legislature will allocate for FY19. The biggest revenue producer for the state is the personal income tax. We are expected to pay the state $1,961,000,000.00 ($1.96 billion) during fiscal year 2019, which begins July 1st.

The next largest amount—nearly $1.3 billion—comes from sales and use taxes. That’s followed by $362 million in severance taxes (primarily from coal and natural gas). The tobacco tax should collect $180 million, while corporations are expected to pay $142 million in income tax. The rest of the General Fund receipts come from B&O taxes, taxes on insurance premiums, lottery money and various other taxes.**

So, where does all this money go?

The biggest expense in FY 2019 will be the same as it is every other year—public education. Forty-four percent of the nearly $4.4 billion dollar budget next year will go toward K-12.  Nine percent of the budget will be allocated to higher ed so, taken together, education accounts for over half of the state’s General Revenue budget.

After public education, the next most expensive state agency is the Department of Health and Human Resources.  Twenty-seven percent of the FY19 budget will be spent on a wide range of services provided by DHHR.  The agency’s 6,000 employees have responsibilities that range from life-saving services for children to health care for poor people to helping you get a copy of your birth certificate.

Military Affairs and Public Safety is next at 8.5 percent of the budget, followed by the Judiciary at 3.3 percent and Commerce at 2.3 percent.  The rest of state agencies and services—everything from government administration to veterans services, constitute just under six percent of overall spending.

Here are some other budget items worth noting:

The state’s Rainy Day savings account had a balance of $709,523,999.13 as of the end of December. That’s below a peak of over $900 million in 2014, but it reverses the downward trend of the last three years attributable to the use of Rainy Day funds to balance the budget.

West Virginia’s Teacher Retirement System has improved dramatically since 2003, when it was funded at only 19 percent.  As of this year, it’s funded at a 67 percent level and the state continues to meet the annual contributions necessary to make it fully funded.

*The “General Fund” budget is annually appropriated by the Legislature. The general and lottery funds appropriated by the Legislature represent only about one-third of the total resources available to state programs.  Another one-third represents special revenue funds, like the state Road Fund and other programs paid for by user fees (college tuition and various regulatory and license fees).  Another one-third of total resources available comes from federal dollars. The lion’s share of that goes to Medicaid and roads.  All these pots of money push total state spending to more than $12 billion.

**$65 million will be transferred from lottery proceeds to the General Fund for FY19.  All other lottery and gaming activities will generate an estimated $349 million that is separate from the General Fund and is divided among a variety of state agencies and services.



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