W.Va. Now Fears Budget Deficit

Guarded optimism marked the opening months of the budget year, but now West Virginia officials believe recession-rocked revenues will not match expectations, The Associated Press reports.

Even though October beat its estimate, state government remains $16 million below projections for the year that began July 1, figures show, and officials expect that gap to grow.

Deputy Revenue Secretary Mark Muchow offered a ballpark estimate of $100 million for the shortfall he expects by the June 30 end of the budget year.

But while other states are laying off workers, shuttering services, cutting programs and even talking tax hikes, Manchin administration officials maintain that such options aren't on the table in West Virginia.

"We are vigorously looking for additional efficiencies in state government," spokesman Matt Turner told AP. "(Gov. Joe Manchin) believes there is much more that can be done to improve efficiency and save money."

AP also observes that West Virginia has an ace in the hole: "$168 million in revenues left unspent from the two previous budget years," the article said. "That surplus is in addition to the state's emergency reserves, which exceed $537 million. The state also has yet to tap the bulk of its estimated $1.8 billion share of federal stimulus funding. "

Muchow noted that West Virginia's "rainy day fund" exceeds the national average in size relative to the state budget, and called tapping it a last resort. Senate Finance Chairman Walt Helmick, D-Pocahontas, echoed that sentiment to MetroNews (with audio).