Thumbs down: West Virginia state revenues falling behind
The stock market may be hitting new highs, but the West Virginia economy hasn’t gotten the memo.
Reports this week show that state revenues continue to run behind budget and earlier forecasts. Collections for March came in about $14 million under projections, the third straight month that the funds coming in were less than expected.
The state now expects to be about $60 million in the red by the end of the budget year this June.
Factors include low natural gas prices and reduced coal production, but officials also say that sales tax revenue is down. They attribute that at least in part to this year’s increase in the amount workers pay in Social Security payroll taxes and the cuts made to the food tax.
State leaders already are making adjustments.
Gov. Earl Ray Tomblin last month put a hiring freeze into effect, and Monday the state Senate targeted $28 million in cuts from current state spending. Some of that money would come from the money lawmakers access for projects in their districts and a premium subsidy for the Public Employees Insurance Agency, according to the proposal.
Those are good steps to take.
The state has often been criticized for maintaining a large “rainy day fund,” but with the economy still uncertain and big-ticket health-care costs looming in the future, that likely was a wise decision.
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