Justice confirms state ending fiscal year with budget surplus

CHARLESTON, W.Va. — Gov. Jim Justice confirmed today that West Virginia’s state budget will end the fiscal year with a surplus.

Justice and his revenue staff said the state finished fiscal year 2018 with net collections of $4.245 billion which is $20.2 million ahead of estimate.

The final report on the budget surplus will be determined at the end of July and should be more than $28 million, Gov. Justice said.

The last time the state finished a budget cycle with a surplus, without mid-year budget cuts, was fiscal 2012, six years ago.

Among the strongest drivers was personal income tax collections, which came in nearly $60 million above estimate and about 6 percent ahead of last year.

Half of any surplus funds left over at the end of the fiscal year will be deposited into the state’s Rainy Day Fund.

Remaining surplus amounts will fund several programs that lawmakers identified in the fiscal 2019 budget bill, including $5 million for the Office of Drug Control Policy, $765,000 to purchase stream gauges for flood control, $2.5 million to boost Division of Tourism marketing, and $2 million to provide Volunteer Fire Departments’ workers’ compensation payments.

Justice, after making today’s announcement about the budget, congratulated his budget chief, Mike McKown, who is leaving to take a job with the state Auditor.  “I begged him to stay,” Justice said.

Justice shook McKown’s hand and said, “I really, really appreciate you.”

The past fiscal year’s budget is the one that required weeks and weeks of special session in 2017 to settle. Governor Justice expressed his displeasure over the first incarnation of the budget the Legislature passed in the regular session by unveiling his veto intentions with a platter of bovine excrement.

The budget the state wound up operating under, he let pass without his signature. “I’m just going to let it go into law. I can’t possibly put my name on it,” he said.

At the time, Justice had wanted a $4.35 billion budget that bolstered revenue by raising the sales tax to 6.5 percent and extending it to additional economic sectors.

His goals included using the new revenue to decrease the personal income tax and establish a tiered severance tax system for coal that gave a break for companies when prices are low.

Justice also wanted to raise teachers’ pay and build a Save Our State fund for infrastructure and economic development.

That budget included a $16 million cut across higher education. There were also spending reductions for tourism, fairs and festivals and state-promoted arts programs.

Justice was so upset that he filled one of his trademark whiteboards with ways the budget just didn’t measure up.

“I really hate this. I really do. I didn’t want us to hurt people more,” the governor said last June 21.

He did provide some budgetary breathing room that year with a late-breaking announcement of a higher revenue estimate of an additional few hundred million dollars a year, bolstered with unorthodox accounting of stimulus from the road bond he was touting.

Eric Nelson

Last week, House Finance Chairman Eric Nelson released a statement applauding the imminent end to the fiscal year with a surplus.

Nelson, R-Kanawha, gave the Legislature credit for holding its ground on spending.

“When we started the budget process in February 2017, we were facing a nearly $500 million deficit,” Nelson stated. “The Governor, who was a Democrat at the time, proposed closing that gap with $450 million in tax increases – something we in the Legislature fiercely opposed.”

 





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