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Despite anticipation of big budget gap, Justice says no state furloughs or layoffs

Despite projections of a $500 million state budget shortfall this fiscal year, Gov. Jim Justice doesn’t see the need for state worker layoffs or furloughs.

“I do not think we’ll have to furlough or lay off anyone,” Justice said in response to a question during a Tuesday briefing about the state’s coronavirus response.

The coronavirus response has knocked an enormous hole in West Virginia’s $4.6 billion general revenue budget with just a few months left in the fiscal year.

Much of that, about $300 million, was caused by the state’s delayed income tax filing to July 15, after the current fiscal year ends.

The rest, an estimated $200 million, is the anticipated result of the severe economic slowdown caused by the coronavirus pandemic, pushing down personal income tax and consumer sales tax collections.

Revenue Secretary Dave Hardy described those numbers Monday on MetroNews’ “Talkline.”

State officials are hoping for relief from the federal government.

West Virginia anticipates about $1.25 billion from a federal relief package passed by Congress and signed by the president.

That money initially was intended to apply directly to coronavirus response by states, but the National Governor’s Association last week asked for increased flexibility to apply the money to additional expenses.

The National Governor’s Association also asked for an additional $500 billion to cover state revenue losses.

West Virginia should know more about how the federal dollars may be used by the end of this week.

“I think there’s going to be real dollars flowing to West Virginia to be able to backfill revenue or our workers or whatever it may be,” Justice said Tuesday afternoon.

Other states in a similar situation have already started taking evasive maneuvers.

Maryland Gov. Larry Hogan announced a budget freeze on Friday with some projections that the state could lose out on $2.8 billion by the end of June, if the stay-at-home order remains in place that long.

In Virginia, Gov. Ralph Northam last week suspended new spending and withheld what would have been deposits into the state’s reserve fund to pay for essential services instead.

Facing a possible $4 billion deficit, Pennsylvania Gov. Tom Wolf has cut spending, laid off thousands of state workers and frozen all non-essential hiring and purchases.

But Justice is counting on federal dollars flowing.

“And I think they will flow in a way that didn’t really necessitate us having a special session and invade the Rainy Day fund and all that,” he said.

“We still may have to do that. I still don’t know absolutely specifically yet. But I know enough to believe that I do not think we will have to furlough or lay off anyone. I don’t think we’ll end up having to cut benefits or cut programs in a harsh way, if in any way.”

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