Overview
Read the full brief.
For the second year in a row, Governor Jim Justice has proposed a “flat” budget for Fiscal Year (FY) 2023, with only minor changes from the FY 2022 budget. While the state is currently enjoying large budget surpluses, those surpluses are the result of billions in federal aid, artificially low revenue estimates, and continued unpredictability from the pandemic. Despite the temporary nature of these surpluses, the West Virginia Legislature is pursuing permanent tax cuts that would overwhelmingly benefit the wealthy, while continuing to neglect public programs and services that are in desperate need of investment. And once again, the governor did not include a six-year plan in the budget, leaving the future budget picture murky, and questions about potential budget deficits unanswered.
Key Findings
- FY 2023 base budget appropriations are $123 million above the FY 2022 final enrolled budget.
- Most of the increase in the FY 2023 budget comes from a proposed public employee pay raise, at $108 million.
- While FY 2022 revenue collections are already $531 million above that year’s revenue estimate, the revenue estimate for FY 2023 is only $75.8 million more than the FY 2022 estimate, which will likely lead to another year of large, artificially-inflated surpluses.
- With the pandemic ongoing, the increased federal match rate for Medicaid under the CARES Act is expected to stay in effect in 2022, saving the state an estimated $200 million. However, budget projections from the Department of Health and Human Resources show significant budget shortfalls for Medicaid in the coming years.
- While the state is currently enjoying a budget surplus, proposed plans to cut the income, severance, and property taxes could jeopardize future budgets.
