04 January 2010

Balancing the Budget in West Virginia

Gov. Joe Manchin will present a new state budget to the Legislature next week, when the House and Senate begin their 60-day regular session. He will also provide lawmakers his administration's latest forecast of projected revenues and spending for the next five years.

As The Associated Press reports, the last forecast saw widening funding gaps. The full brunt of the recession may have since only worsened those deficit threats. While Manchin and lawmakers again expect to tap federal stimulus funds to keep the current budget balanced, AP reports that they may soon need to find another strategy.

"House Finance Chairman Harry Keith White, D-Mingo, noted last week that the stimulus requires states to spend the bulk of their shares by 2011," the article said. "West Virginia's overall financial picture has White's Senate counterpart seeing serious, permanent cuts to state spending on the horizon."

The article also observes some silver linings. "State budget officials estimate that general revenue will finally resume growth during the 2012 fiscal year," it said. "Manchin also announced late last week that December's general revenues exceeded their estimates by around $32 million."

AP also reports separately on the fiscal terrain looming before state governments nationwide, citing how "forty-five states hold regular legislative sessions in 2010, most convening in January.

"As lawmakers head back to state capitols this month, budget woes range 'from bad to ridiculously bad,'" that article said, quoting David Wyss, chief economist at Standard & Poors in New York.

"There are some states, those hit particularly hard by the recession, that I don't think can cut spending enough. They're running out of things to cut," Wyss told AP, which reports that "Forty-three states and the District of Columbia have already slashed spending on popular services, including education, health care and services to the elderly and disabled."

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