Declining Revenues Result in Mid-Year Budget Cuts for State Agencies
State agencies will experience mid-year budget cuts for the second year in a row as West Virginia tax collections continue to come in below estimates.
Gov. Earl Ray Tomblin announced the 2 percent, across-the-board cuts for state agencies in a press release Tuesday.
As of Nov. 2, state tax collections were more than $87 million below estimates for the fiscal year that began in July.
The spending cuts include a more than $11 million reduction to the state’s school aide formula, or the state dollars given to county school systems. The governor is also reducing Medicaid spending by $25 million this year.
To help cut costs, Tomblin will continue a state hiring freeze that’s been in effect since 2013.
The governor is also redirecting more than $25 million away from paying off old workers’ compensation debts to the general revenue fund to make up for declining revenues.
Tomblin said in a statement that enacting the cuts would not be easy, but he must ensure the state budget remains balanced to maintain long-term fiscal stability.