Blog Posts > Trouble Ahead: The West Virginia FY 2021 Proposed Budget
February 13, 2020

Trouble Ahead: The West Virginia FY 2021 Proposed Budget

Governor Jim Justice’s FY 2021 budget is largely unchanged from FY 2020, with stagnating revenues preventing any major new spending and one-time budget maneuvers preventing any spending cuts. While the FY 2021 budget is stable because of a large surplus in Medicaid, the state faces significant budget gaps in the coming years that may require more revenue if the state wants to avoid large cuts to important programs and services. Read the full issue brief.

Key Findings

  • General Revenue collections are expected to be down $56.8 million in FY 2021, leading to an overall flat budget from FY 2020
  • $108 million in one-time, surplus Medicaid funds are being used to prevent budget cuts.
  • Severance tax revenues are projected to decline sharply in FY 2021, $106 million below FY 2020 estimates. Due to the reduction of the severance tax on steam coal, this trend will likely continue for years to come.
  • Slow revenue growth is resulting in no reinvestment in higher education and several other budget areas.
  • Despite little new spending, West Virginia faces significant budget gaps in the coming years. This could be made worse by proposed business tax cuts currently under consideration by the 2020 legislature.

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