One of West Virginia’s top financial officials says the state anticipates some significant budget pressures up ahead, including increased costs associated with insurance for public employees and monetary support for students seeking education outside the public school system.
Changes at the federal level also could affect West Virginia’s finances in a range of ways.
“A couple of future challenges, things to things to just sort of keep in mind as we continue to look at our revenues, as we continue to to plan for the future,” said Peter Shirley, deputy secretary of the Department of Revenue.
Shirley was presenting financial perspective during a meeting of the Joint Standing Committee on Finance during legislative interim sessions at Stonewall Resort State Park.
One of the upcoming challenges, he said, is anticipated cost increases through the Public Employees Insurance Agency. He said state financial officials anticipate a $49 million cost increase for fiscal 2027 and a cost increase of $56 million for fiscal 2028.
The Morrisey administration has discussed the possibility of a special legislative session to focus on the increasing costs health insurance for public employees.
“PEIA is obviously something that there’s a lot of discussions regarding a lot of work being done to try and think about the long term future of how we how we stabilize PEIA,” Shirley told lawmakers.
Another growing expense for the state is the Hope Scholarship, which provides financial support for families pursuing educational options for students outside the public school system.
“The Hope Scholarship is another budgetary item that we’re keeping a close eye on, and the estimate is $190 million in base build for FY 27,” Shirley told lawmakers.
The scholarship amount for each student is expected to be $5,267.38 for the 2025-2026 school year. Shirley said the cost to the state is a mathematical problem of how many students opt in to the program for the coming year.
“So hopefully we’ll be able to refine those numbers in the not too distant future now that we know what the actual enrollment at least to receive a four-year scholarship will be going forward,” Shirley said.
Changes at the federal level also are likely to affect state finances, he said. Those include proposed changes to the federal tax code as well as changes to provider taxes and changes to Medicaid and the Supplemental Nutrition Assistance Program.
Shirley also detailed other aspects of West Virginia’s financial picture, including how the state is processing a rebate on personal property taxes for vehicles.
So far, he said, the car rebate has paid out $128.6 million. The original budget for the car credit was $200 million for the full fiscal year.
“So there’s still a lot of room,” he said.
“One thing that we’re, you know, obviously monitoring very closely is how many people ultimately end up claiming that, and how much do we ultimately end up paying out?”