When it was announced this autumn that the state forecast a $100 million budget shortfall by the start of the 2010 Fiscal Year, officials were not alarmed. Instead, they proceeded on with caution — Gov. Joe Manchin had hoped to close the $100 million gap through savings within agencies and programs.
As we approach the new year, it appears as if that shortfall will be closer to $120 million, and for the first time in five years, the governor is asking state agencies to make midyear budget cuts.
What he has asked is a 3.4 percent cut in general revenue spending halfway through the fiscal year — which, for many agencies, may feel like a 6.8 percent cut because half of their budget may have already been spent in the first six months of the budget year.
State officials in all three branches have until Jan. 20 to report to the governor how they intend to make the cuts.
The expectation is not, however, intended to lay off state workers. In fact, Manchin told The Associated Press Monday that the midyear cuts should help prevent program cuts or state employee furloughs. That puts West Virginia’s state workers in a better category than 16 states where furloughs have been implemented or 23 states where workers have been laid off.
“While revenue collections in some areas have exceeded estimates, the projected surplus in those areas is not enough to make up for the shortfall in other revenue,” Manchin said in a statement earlier this week. “Our cash flow is still in solid shape and we are not borrowing or delaying payments for invoices, so we are still running on schedule. However, we must take these pre-emptive actions to prevent more drastic measures later.”
Certain budget lines, including “programs that fulfill a vital state interest and debt service,” are exempt from Manchin’s executive order.
Another bright spot in the budgetary cuts is that the state education system will not feel the effects. According to the Charleston Daily Mail, the state will use federal stimulus money to “backfill” cuts to education.
The school aid formula, which funds salaries, makes up about half the state’s annual budget, coming in at $1.7 billion. The governor’s mandated cut will be on paper only — the $58 million will be immediately replaced by stimulus funds. The same “backfill” will be applied to higher education budgets, as well.
Budget officials say that without the stimulus funding meant to boost education systems, the midyear cuts would have been doubled for other state agencies.
This country is not out of this economic storm yet, but there has been some measured improvement in many categories. But pair West Virginia up with other states in the union and you will find that a 3.4 percent cut to agencies isn’t too shabby. We hate to use the “it could be worse” cliche, but honestly, West Virginia is not laying off employees or cutting vital programs because of budget shortfalls.
This administration has continued to act in a fiscally responsible way, during the “lean” times, as well as the “fat” ones.
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