Boettner: Long-term Budget Fix Needed
"We're in a real crisis," Ted Boettner, executive director of the nonprofit and non-partisan West Virginia Center on Budget and Policy, said during Monday's meeting of the Parkersburg Rotary Club at the Blennerhassett Hotel.
Boettner addressed club members on what the budget consists of and why there is a $271 million gap between what's proposed to be spent and the revenue expected to be raised. At the same time, members of the West Virginia House of Delegates were working on a compromise budget in order to avoid a government shutdown on July 1.
Even before learning of the House's passage of a 65-cent cigarette tax increase, Boettner said he did not think the government will actually shut down.
"I think it's highly unlikely. I think cooler heads will finally prevail," he said.
Boettner predicted Gov. Earl Ray Tomblin will eventually agree with what the Legislature sends him, rather than risking a shutdown with another veto.
"At the end of the day, it's a game of chicken," Boettner said.
The state has faced persistent budget gaps for the last couple of years, Boettner said. He attributed it to multiple factors, including the elimination of the sales tax on groceries and the business franchise tax, along with the lingering effects of the national recession and a decline in coal production.
The latter element caused the projection for severance tax revenue for the current fiscal year to drop from $525 million to less than $280 million, Boettner said.
The primary way the state has addressed those recent gaps has been to use money that isn't coming back the next year, such as taking it from the rainy day fund, he said.
"If you use one-time money to patch something, you're going to have to come back and address that existing problem in your books," Boettner said.
Already, the budget gap for fiscal year 2018 is projected at $380 million, he said.
Boettner would like to see the state establish a task force to review a variety of issues, including potential new sources of revenue such as a tax on cell phone usage. The group could also look at improving government efficiency, something that could not be effectively done with the current ticking clock.
Boettner said the state needs to invest in higher education, which is funded at a lower level today than in 2008, even without adjusting for inflation. That would help provide the educated workforce needed to attract companies to the state, he said.