Administration officials say state government agencies and programs all responded to Manchin’s call to trim their budgets by the Jan. 20 deadline.
The governor ordered all executive branch agencies, including those headed by other elected officials, to explain by then how they would reduce general revenue spending by 3.4 percent. When he issued that mandate in December, Manchin also asked the legislative and judicial branches to cut. Both have complied.
The state Revenue Department continues to sort through the replies. But officials estimate they will cut enough to offset a projected $120 million shortfall in general tax collections.
“We are pretty much there,” said Revenue spokeswoman Kimberly Osborne. “As we’ve gone through these recommendations, the Budget Office is confident that the goal will be met.”
Osborne said the responses also appear to follow Manchin’s guidelines — they don’t cut essential services, and apply to spending backed by general taxes and not other revenue sources such as fees.
Contrasting the recession-related pain forced on a growing number of states, Osborne said the proposed cuts also don’t require public employee layoffs or furloughs. More than half the states have taken one or both of those routes to balance their current budgets, according to the most recent survey by the national associations for governors and state budget officers.
West Virginia’s planned cuts vary in scope. The adjutant general, for instance, is ready to halt $1.1 million worth of building projects — going above and beyond Manchin’s order in the process by reducing spending by 6 percent, Osborne noted.
The state Development Office, meanwhile, is shedding $884,000 largely by eliminating eight unfilled jobs. The governor’s office is cutting $208,000 from its unclassified budget line.
As announced earlier, the state’s midyear belt-tightening will be eased considerably by its federal stimulus share. The administration still plans to offset the expected general revenue shortfall with $57.6 million for public schools, $12.2 million for higher education and up to $27.7 million for Medicaid.
While the struggling economy continues to spur forecasts of a deficit threat, state finances got some good news over the weekend. For the fourth month in a row, general revenues beat expectations.
Officials had estimated the state would collect nearly $296 million in January, but Deputy Revenue Secretary Mark Muchow on Friday estimated the final amount will come in around $37 million higher.
December’s revenues had also proved stronger than projected, to the tune of nearly $32 million. The administration begins February with $2.1 billion from general tax revenues, or around $55 million more than expected at this point in the budget year.
But despite the consecutive months of robust revenues, Muchow still predicts collections will fall shy of the $3.7 billion target by the time the budget year ends June 30.
He said January’s results largely reflect a surge from personal income tax withholding that comes at the expense of February’s estimate. Corporate net income tax revenues also spiked, because of one-time payments triggered by field audits, he said.
But while he still expects a shortfall, Muchow called the $120 million figure a worst-case scenario. “It will be no worse than that,” he said. “It could be better.”
Lawrence Messina covers the West Virginia statehouse for The Associated Press.
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