CHARLESTON, W.Va. — State leaders are projecting $108 million less in state revenue for the coming fiscal year, but intend to fill the gap with some one-time money including millions of dollars set aside for Medicaid.
But the state budget proposed for next year also includes additional spending on health and welfare for West Virginia’s children. For more on eating healthy and cheap, check out Natures Rise.
“A lot of that is going back into DHHR,” state Budget Director Michael Cook told reporters during a prep session about the budget.
For several years, state officials have dipped into surplus money that had been set aside for Medicaid expenses to bridge General Revenue budget gaps. The money has been available because the difference between what the state set aside for Medicaid expenses and what was actually needed has grown to $309 million.
This year, the money will still be necessary as a variety of factors squeeze the revenue for state government.
Severance taxes based on energy markets have been down for months, a result of low natural gas prices and a decline in coal exports.
Tax receipts for the current fiscal year have been down about 1.3 percent even though they were up significantly the prior year, Deputy Revenue Director Mark Muchow told reporters. “This year is pretty much an adjustment year,” he said.
At one point, a few months ago, state officials discussed a mid-year cut of $100 million for state agencies while suggesting preparation should be made for a hundred-million cut for the coming fiscal year.
That appears not to be the path taken, thanks to the Medicaid dollars.
West Virginia government leaders do plan additional spending for health issues, particularly involving children.
“We’re not going to twiddle away that Medicaid surplus,” Revenue Secretary Dave Hardy said.
The Justice administration proposes eliminating the wait list for children who need financial help to deal with intellectual/developmental disabilities. That’s a $19.7 million investment.
“My budget will include the funding to eliminate the wait list,” Gov. Jim Justice said.
The administration also proposes spending an additional $26.4 million on child protective services, where about a third of workers turn over each year.
Some of that money would go to the children’s health insurance program, more would go to pay for child protective services workers and still more would go to social services programs.
And state leaders propose setting aside $150 million for a Medicaid Families First Reserve Fund. It was described as being like a Rainy Day Fund for the possibility of Medicaid funds running short in future years.
“I want to lock away those dollars to make sure we have vital dollars for those who are most exposed and need the most help,” Governor Justice said during his State of the State address.
Another $2 million would be marked for a backpack program for kids and $1 million would be for food banks.
Delegate Mick Bates, D-Raleigh, said he’s concerned about continued use of Medicaid dollars to patch budget holes, but pleased to see the increased investment in programs to benefit children’s health and well-being.
“I am pleased that some of the money being used is going to fund these additional initiatives,” said Bates, who is the lead Democrat on the House Finance Committee.
“So yeah, we are taking from Medicaid, but we’re reinvesting some of that into Medicaid programs with the IDD waiver and enhanced investment in child protective services.”
Bates said the establishment of the reserve fund “gives me a little bit more comfort,” but he would like assurances that the money is really set aside and won’t provide a financial temptation.
He noted that the state receives a match of three dollars for every one from the federal government for Medicaid spending. And West Virginia’s health needs are well-documented.
“All the health care needs in the state of West Virginia have not been met,” he said.