Justice moves money around to balance budget by midnight deadline

CHARLESTON, W.Va. — Gov. Jim Justice signed three executive orders Tuesday, the last day of the fiscal year, to move money around in order to meet the requirement of the state Constitution to have a balanced budget at midnight June 30.

Gov. Jim Justice

The Justice administration is facing an extra challenge this year because of the COVID-19 pandemic that has created a $255 million revenue deficit. Justice also deferred income tax collections from the normal April 15 deadline to July 15.

According to the order, the state won’t balance its budget unless spending is reduced by $198 million and revenues increased by $57 million beyond lowered projections.

To obtain the $198 million reduction, Justice has ordered the move of $186 million in Medicaid funding from the general revenue budget of the state Department of Health and Human Resources. A Justice administration official said the total amount is being captured in other areas of the budget and there would be no cuts to Medicaid.

The state has additional money to cover Medicaid after the federal government increased the matching rate for the program by 6.2 percent in January.

The other $12 million in the executive order comes from the the Department of Military Affairs and Public Safety, $9 million; the Department of Education, $2 million; and the Department of Commerce, $1 million. It’s unspent money that was set to expire at midnight Tuesday.

The new state budget, which takes effect Wednesday, is expected to get a boost from the new July 15 tax filing deadline, state Revenue Secretary Dave Hardy said.

Dave Hardy

“Generally the tax returns that come in at or near the deadline are tax returns where the taxpayer is actually paying additional tax,” Hardy told MetroNews. “So we’re expecting a big upsurge in revenue as we had predicted back in April.”

Hardy predicted, as the governor’s executive order did Tuesday, income tax payments could reach $200 million.

“It will not only be the annual return from last year but also the April 15 and June 15 estimate,” Hardy said. “We’ve never been in this situation before but our best range is $180 million to $200 million.”

Hardy said there are roughly 70,000 state income tax returns that are still left to be filed. The new federal tax filing deadline is also July 15.

The other executive orders signed Tuesday are also budget related:

extending the annual payment due for casino’s racetrack table game licenses from July 1 to Oct. 1.

borrowing $68.6 million from the state’s Rainy Day Fund to create cash flow as the new budget year begins. The annual transfer will be paid back within 90 days.

Gov. Justice is expected to discuss the budget at his media briefing Wednesday at the state capitol.

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