The 2019 Legislative Session ended last week, with the state budget passed a day early. While every year, the budget undergoes some changes from the governor’s proposal to the final product, this year saw relatively few changes.
The FY 2020 budget proposed by Governor Justice includes new spending initiatives and pay raises while avoiding spending cuts as the state’s financial situation began to improve after years of major budget gaps.
Several tax bills passed during the session changed the amount of revenue available from the governor’s proposal. The governor’s budget proposal budgeted for an exemption of Social Security income from state income taxes, which would have reduced revenue by $50 million. However, the final version of the bill phased in the exemption over three years, reducing its cost for FY 2020.
The legislature also passed a coal severance tax cut that would reduce revenue by $21 million in FY 2020, and a severance tax cut for low volume natural gas wells, costing $16 million in FY 2020. Overall, General Revenue collections are anticipated to be $4.676 billion.
On the expenditure side, the governor’s major spending initiatives included a five-percent pay raise for all state employees. However, increasing teacher pay requires separate legislation from the budget bill, and such a bill did not make it through the legislature. So while the money is appropriated for the teacher pay raise in the budget, the pay raise will not go into effect without additional legislation that would have to be passed during a special session.
The final budget includes a $10 million appropriation for the WV Invests Grant Program, the last-dollar-in free tuition program for the state’s community and technical colleges, as well as $12.8 million in increased funding for the state 4 year colleges and universities, and an additional $5 million for the state’s community and technical colleges.
Other expenditure increases include $2.4 million for state police retirement, $1.5 million for local health departments, $1.0 million for dam repair, $500k for broadband development, $500k for state police equipment, $500k for child advocacy centers, $300k for the newly created military service members court, $125k for mastery based education, and $120k for low income student AP exam fee assistance.
Items cut or removed from the governor’s proposed budget include $5 million from the Supreme Court, due to the failure of the Intermediate Court of Appeals legislation to pass and $7 million for the WV Tourism Office, which saw the general revenue funding for governor’s tourism initiative cut from $14 million to $7 million, with the $7 million to be made up with surplus revenue. $3 million was also removed from economic development projects in the the Commerce Department. In addition, the General Revenue Appropriation for Medicaid was reduced by $50 million, freeing up resources for tax cuts and other expenditures.
The table below compares General Revenue expenditures by major category for FY 2019 and FY 2020.
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