Budget Beat – April 11, 2014

Wetzel County Not Seeing Same Impact from Natural Gas Drilling as Neighboring States

West Virginia, Ohio and Pennsylvania are undoubtedly at ground zero when it comes to the gas drilling boom created by fracking in the Marcellus Shale. A new report out this week, however, shows that Wetzel County has felt the gas boom differently than counties in its neighboring states.

The Multistate Shale Collaborative, of which the WVCBP is a member, released a group of case studies this week at that look at the impacts of gas drilling including housing needs, effects on roads and infrastructure, strains on education, increases in crime and more.

The story in Wetzel County is that there really isn’t a story. While gas drilling has certainly increased dramatically, it hasn’t transformed the county’s economy. Unemployment remains high, and the main impact on county services has been an increase in heavy truck traffic. Read the Wetzel County case study.

Read more in the State Journal and the Wheeling Intelligencer.

multistate_shale_logoC2

West Virginia Gets a “C” in Transparency

Tax cuts and credits are often touted as a way to attract businesses and create jobs in West Virginia. Is it working? With little transparency in the process, it is impossible to know. This week West Virginia received a “C” for transparency in government spending, in particular on the data it makes available on economic development subsidies. Read more in this Charleston Gazette article.

West Virginia’s Top Medicare Billers

A step toward more transparency hit the news this week as the Centers for Medicare and Medicaid Services released data on Medicare payments made to doctors across the country. Check out Brandon’s blog post to see the top recipients of Medicare dollars in West Virginia.

Climate Change and the Highlands: What’s at Risk?

Learn about climate change directly from scientists who are studying how it’s likely to affect the West Virginia highlands. The West Virginia Allegheny Highlands Climate Change Impacts Initiative is hosting a conference at Blackwater Falls State Park June 6 – 9, 2014. Register here or sign up for updates. The impressive list of speakers and presenters includes many West Virginia natives.

Williamson RailyardPhoto by Beth Spence

Coal’s Clout Endures

Coal plays a big role in discussions of climate change. It also remains a big player in West Virginia’s politics, despite the projected decline of the industry and coal production. Read more in this piece from Bloomberg BusinessWeek.

West Virginia’s Top Medicare Billers

The Centers for Medicare and Medicaid Services (CMS) announced the release of a bunch of Medicare data today, the biggest release in CMS history, in fact.  The data include information for nearly 900,000 distinct health care providers across the country who received over $77 billion in Medicare payments in 2012.  This is the second big step in Medicare transparency in the past year as this release comes on the heels of last May’s release of the cost of the most common in-patient procedures at every hospital around the country.

What makes these data so interesting and potentially useful is that they include payment information broken down by individual physician and the services they provided. 

The Wall Street Journal has a neat user-friendly database of the top 200 providers in each state. Playing around with the data shows a few noteworthy trends in West Virginia.  For example, five of the 10 providers who received the most Medicare payments were ambulance service providers.  This was led by the Kanawha County Emergency Ambulance Authority, which received $6.3 million in Medicare payments. Of individual providers, we’re able to see that the physician in West Virginia with the most Medicare payments was Dr. Craig Morgan, an ophthalmologist in Huntington who received almost $5 million in Medicare reimbursement.

Table 1: The 20 health care providers, by type, in West Virginia receiving the most in Medicare payments in 2012

Top 20 Medicare Providers in WV

Ophthalmology and oncology are the two medical specialties receiving the most Medicare dollars in West Virginia, in line with national trends. Specialties that, as the Wall Street Journal notes, were singled out by the inspector general of the Department of Health and Human Services urging greater scrutiny of doctors receiving large Medicare payments. In all, fourteen physicians in West Virginia received more than $1 million in Medicare payments in 2012.

Table 2: These 20 physicians received the most in Medicare payments in West Virginia in 2012

Top 20 Medicare Physicians WV

While it’s important to recognize that this is simply raw data and there is no context of patients’ diagnoses or reasons for treatment, it’s a huge step forward in providing consumers (and researchers) more transparency. It should also help push physicians to reconsider low-value, high-cost procedures or to choose cheaper, generic alternatives instead of costlier brand name drugs.

Budget Beat – April 4, 2014

Governor Tomblin Signs Minimum Wage Bill into Law

Nearly a month after the end of the 2014 Legislative Session, Governor Earl Ray Tomblin signed into law legislation to raise West Virginia’s minimum wage to $8.75 an hour by 2016. Raising the minimum wage will give a raise to over 120,000 working West Virginians, boost the state’s economy and help reduce poverty in the state.

While the governor was making his decision, misguided business interests tried to derail the bill in the 11th hour. The WVCBP worked with legislative leadership and coalition allies to ensure the governor would sign the bill. In case you missed it, articles appeared in the Charleston Daily Mail, Wheeling Intelligencer, Charleston Gazette. Here’s Ted and Alyson’s blog post countering claims from business groups that the bill would be bad policy.

On another front, Senate President Kessler and House Speaker Miley urged the governor to sign the bill and cited WVCBP data in their letter to him.

While this is great news for West Virginia workers, there is also a national effort to raise the wage even higher to $10.10 an hour. This campaign made its way through Charleston on Wednesday. Read more in the Charleston Daily Mail and Charleston Gazette.

Alyson minimum wage bus 4.2.14WVCBP’s Alyson Clements led the effort to bring a higher minimum wage to West Virginia (Charleston Daily Mail photo).

Budget, and All Its Cuts, Also Becomes Law

The day is almost here when we write that check to pay off our state income taxes. Well, not all of us. Many corporations pay zero in state taxes, jumping through loopholes that put West Virginia’s budget into the red this year. Read more here from West Virginia Public News Service.

Tax cuts often lead to budget cuts and the FY 2015 budget has its share. Here’s Sean’s blog posts which give a quick look at how the budget turned out and where the governor’s vetoes were felt.

ACA Enrollment Continues to Rise

The number of West Virginians signing up for health care under Obamacare went up in March as the deadline to sign up loomed. More on the numbers in this Charleston Gazette article. As of April 1, 104,827 West Virginians had signed up for coverage under Medicaid alone.

Hopefully the number of West Virginians signing up for health care will help turn around the state’s ranking as one of the nation’s most unhealthy. Brandon’s blog post looks at county-by-county results which show the state’s poorest counties tend to be its most unhealthy. Pleasants County is the state’s healthiest, while McDowell remains its least healthy.

While Obamacare enrollment numbers continue to rise, the ACA still has its opponents. Check out Brandon’s blog post for rebuttals to some of the lingering arguments against the Affordable Care Act.

Policy in Print

Many state employees enrolled in PEIA can now switch their children’s coverage over to CHIP, saving both their families and the state money. This change is in large part due to WVCBP policy recommendations made to Governor Tomblin last year. Check it out on the cover and page two of this year’s PEIA benefit guide

PEIA coverage guide

Call for A Summer Research Associate

The WVCBP is currently accepting resumes for its summer research associate position. This year’s project will focus on tax and budget research and the revamping of the primer “Guide to the State’s Budget” which was originally published in 2008. If you are interested, or know someone who is, please forward their resume to lframe@wvpolicy.org.

Ted at funders conference 4.2.14This week in Athens, Ohio, WVCBP Executive Director Ted Boettner checks out a 3-D printer at the Appalachian Funders’ Conference this week.

And, Finally

In case you missed it, the New Yorker ran this amazingly comprehensive piece putting in perspective the politics behind January’s chemical spill, lobbyist control over the state legislature and how the state is evolving politically and why. Chemical Valley: The Coal Industry, the Politicians and the Big Spill is worth your time and written by someone who’s lived here. The piece also mentions the WVCBP’s proposal of a Future Fund to diversify the state’s economy.

Hopping Over The Affordable Care Act

While I appreciated reading a column this week by Hoppy Kercheval about the ACA, I was disappointed to see him recycle the same arguments that have been disproved for months now.

Hoppy’s biggest concern is how we’re going to pay for Medicaid expansion in the future. He points out that the actuarial estimates showed that over 10 years West Virginia will take in $5.2 billion in federal funds while having to spend an additional $375 million in state dollars. What he doesn’t consider is the impact of all that additional money on the state’s overall economy. Many states that debated Medicaid expansion did a study on the economic impact of expansion (unfortunately, Governor Tomblin never requested one) and in most states that did them, it was determined that there would be a net economic gain. Next-door neighbor Kentucky, for example, found that expanding Medicaid would save the state $800 million over the next eight years. This is because the increased federal and state dollars will create permanent jobs, an estimated 16,700 of them in Kentucky alone, which generates significant economic activity and tax revenue that otherwise would not exist. Using Kentucky as a guide for a little napkin math, I previously estimated that West Virginia could see the creation of over 6,500 jobs and a net positive economic impact of over $40 million per year. Put another way, it would cost West Virginia more money not to expand.

Another concern of Hoppy’s is that the federal government will renege on its promise to fund 90 percent of the Medicaid expansion in the years ahead. However, there is no historical precedent in which the federal government has backed out on a legal promise to states to fund programs.  Had something like that ever happened, especially at this scale, it may be a reasonable argument, but otherwise it sounds little different than “I don’t want to take this new, better job because I may get laid off one day.”

Hoppy’s next concern is that “there is no guarantee that providing people with free health insurance…will encourage people to make price-conscious decisions about their care.” This ignores the fact that uninsured people who get sick or injured are forced, by default, to make the least price-conscious decisions possible. If you are uninsured, you will be unlikely to afford preventive care but that doesn’t mean you won’t seek care when your condition gets so bad you really need it. Many of these folks enrolling in Medicaid today have conditions like diabetes which can be effectively controlled at a much lower cost with regular care than being forced to wait until they go into diabetic shock and show up in an ER via ambulance.

There’s a related point to be made here that lack of price transparency, arguably one of the biggest problems in American health care, makes it difficult for anyone to make price-conscious decisions. Very rarely will anyone, whether that’s your doctor or your insurer, be able to tell you in advance how much a particular visit or procedure will cost. Imagine going to a restaurant with no prices on the menu and neither the waiter nor the chef are willing or able tell you how much your dinner will cost until they send you a bill in the mail weeks later. You’d have quite a hard time making price-conscious decisions without that information, but that is the very frustrating reality in which we currently live.

Hoppy’s next concern exemplifies the disingenuous tactic that opponents of the ACA often use which is to point out historical problems with our health care system and suggest they are somehow related to the ACA.  He states that West Virginia has a provider issue. While this is both true and false, most importantly it is nothing new.  First off, when you look at the state as a whole, we actually have a higher rate of primary care physicians than most states while we also have the highest proportion of Federally Qualified Health Centers in the U.S. (Hoppy acknowledges both of these, which contradicts his opening statement).  The bigger point though is that provider access issues are highly localized. This is just as true across the country as it is in West Virginia. For example, Ohio County has a ratio of one primary care doctor per 632 residents, ranking it one of the highest in the entire U.S., while Clay County, with only one primary care physician per 4,679 people, is much lower than the national average. But this issue of provider shortages in rural or underserved areas has been acknowledged for decades. It could be argued that these issues may be exacerbated as more people gain health insurance but it could also increase the number of providers willing to practice in underserved areas as more people in the community can pay for care. And even if it were true that we don’t have enough providers, is the acceptable course of action limiting the number of people who can afford to access those providers?

None of Hoppy’s concerns that he expresses here are anything new, they are all issues that have been addressed and disproven across the country.  Are there consequences to expanding Medicaid? Certainly there are some, but the evidence has shown that they are greatly outweighed by the benefits, both for the economic health of our state and the physical (and financial) health of its residents.

2014′s Bills Passed with a Fiscal Impact

The Legislature passed 201 bills during the 2014 Legislative Session. 51 of those bills came with fiscal notes attached, the price tags attached to legislation that inform legislators and the public of the estimated cost to the state in either expenditure increases or revenue losses. Fiscal notes are usually attached to a bill when taxes or fees are assessed or a new program, service, or fund is being created. While there are significant flaws with fiscal notes in West Virginia, they still contain important information.

Of the 61 fiscal notes attached to completed legislation in 2014 (some bills have more than one fiscal note, submitted by different agencies, which is why there are more fiscal notes than bills), 17 identified a measurable expenditure impact. Seven of these fiscal notes identified a negative expenditure effect, meaning that the passage of the bill would reduce government spending, while 10 identified a positive expenditure effect. In total, the 19 fiscal notes show that the passed legislation would increase state spending by $61.2 million. The largest of these was SB 391, providing salary increase for teachers and school service personnel, at a cost of $38 million.

In addition, another eight fiscal notes identified possible expenditure changes, but were unable to provide an estimate.

Four fiscal notes identified a measurable revenue impact. Three of these fiscal notes showed a positive revenue impact, meaning that the passage of the bill would increase government revenue, while one showed a negative impact, indicating a reduction in revenue. In total, the four fiscal notes show that the passed legislation would increase government revenue by $5.4 million. The largest of these was SB 328, terminating the Strategic Research and Development Tax Credit, which increased revenue by $4 million.

In addition, another six fiscal notes identified possible revenue changes, but were unable to provide an estimate. Notable among these bills are two tax incentive bills: HB 4184, otherwise known as the Greenbrier tax credit, and HB 4343, the Project Launchpad Act. 

Below is a list of the bills passed with a fiscal note.

Bill

Summary

Full Expenditure Impact

Full Revenue Impact

SB 90

Creating criminal offense for interfering or preventing call for assistance of emergency service personnel

$0

$0

SB 204

Relating to crime victims compensation awards

-$1,204,000

$0

SB 315

Clarifying use of certain funds under Military Authority Act

$0

$0

SB 328

Terminating Strategic Research and Development Tax Credit

$0

$4,000,000

SB 331

Requiring certain accelerated payment of consumers sales and service and use tax and employee withholding taxes

$0

$0

SB 356

Relating to purchasing reforms

$0

$0

SB 373 (DEP)

Relating to water resources protection

$755,715

$930,715

SB 373 (DHHR)

Relating to water resources protection

$454,191

$0

SB 375

Excluding certain personal property from TIF assessment

$0

$0

SB 391

Providing salary increase for teachers and school service personnel

$38,988,702

$0

SB 402

Permitting recovery of service charge and fees charged to Tax Commissioner by financial institutions

-$25,000

$0

SB 414

Redirecting nonprobate appraisement filings

$0

$0

SB 416

Relating to tentative appraisals of industrial and natural resources property

-$5,000

$0

SB 431

Relating to issuance and renewal of certain driver’s licenses and federal ID cards

-$560,228

$372,420

SB 443

Relating to SPRS

$0

$0

SB 444

Relating to PERS

$0

$0

SB 452

Relating to TRS annuity calculation of member with reciprocal service credit

$0

$0

SB 456

Extending expiration date for health care provider tax on eligible acute care hospitals

$19,932,495

$0

SB 457

Requiring programs for temporarily detained inmates in regional jails

$0

$0

SB 458

Dedicating certain circuit court fees to fund low-income persons’ civil legal services

$0

$0

SB 461

Creating Future Fund

$0

unknown

SB 469

Creating Veterans and Warriors to Agriculture Program

$0

$0

SB 486

Establishing salaries and providing raises for State Police forensic lab employees

$644,931

$0

SB 523

Providing for additional state veterans skilled nursing facility in Beckley

$0

$0

HB 2165 (DHHR)

Relating to death certificates of military veterans

$0

-$108,713

HB 2165 (Veteran’s Affairs)

Relating to death certificates of military veterans

$0

$0

HB 2954

Requiring that members of the Mine Safety Technology Task Force are paid the same compensation as members of the Legislature

$0

$0

HB 4005 (Corrections)

Relating to criminal offenses for child neglect

unknown

$0

HB 4005 (DHHR)

Relating to criminal offenses for child neglect

$0

$0

HB 4006 (Corrections)

Relating to the possession and distribution of child pornography

unknown

$0

HB 4006 (DHHR)

Relating to the possession and distribution of child pornography

$0

$0

HB 4006 (Supreme Court)

Relating to the possession and distribution of child pornography

$0

$0

HB 4184 (Development Office)

Relating to the West Virginia Tourism Development Act

$0

$0

HB 4184 (Tax Dept)

Relating to the West Virginia Tourism Development Act

unknown

unknown

HB 4210

Juvenile sentencing reform

$0

$0

HB 4228

Repealing or removing certain portions of education-related statutes that have expired

-$190,000

$0

HB 4236

Sexual assault nurse examination network

$156,446

$0

HB 4254

Providing that certain state employees may be granted a leave of absence with pay during a declared state of emergency

unknown

$0

HB 4256

Amending the annual salary schedule for members of the state police

$408,562

$0

HB 4270

Relating to salaries of service employees of the state camp and conference center known as Cedar Lakes Conference Center

$0

$0

HB 4283 (Div of Labor)

Raising the minimum wage

$650,000

unknown

HB 4283 (Div of Personnel)

Raising the minimum wage

unknown

unknown

HB 4284

Pregnant Workers’ Fairness Act

unknown

$0

HB 4290

Revising the regulatory structure of money transmitters and other entities

$0

$210,476

HB 4318

Continuing education of veterans mental health

$0

$0

HB 4332 (DHHR)

Extending the time that certain nonprofit community groups are exempt from the moratorium on creating new nursing home beds

$4,165,000

$0

HB 4332 (Health Care Authority)

Extending the time that certain nonprofit community groups are exempt from the moratorium on creating new nursing home beds

$0

$0

HB 4332 (PEIA)

Extending the time that certain nonprofit community groups are exempt from the moratorium on creating new nursing home beds

$0

$0

HB 4343

West Virginia Project Launchpad Act

$110,000

unknown

HB 4349

Clarifying retirement dependent child scholarship and burial benefits under a Qualified Domestic Relations Order

$0

$0

HB 4350

Providing for the awarding of a West Virginia Veterans Medal and ribbon, and a West Virginia Service Cross and ribbon to certain qualifying West Virginia Veterans

$0

$0

HB 4363

Creating an informal dispute resolution process available to behavioral health providers

$0

$0

HB 4365

Relating to employer remittance and reporting of Teachers Retirement System member contributions to the retirement board

$0

$0

HB 4373

Relating to driver education programs

-$3,064,842

$0

HB 4393

Creating the Dangerous Wild Animals Act

unknown

unknown

HB 4425

Giving the Superintendent of State Police authority to hire additional staff

-$16,568

$0

HB 4432

Adopting Principle Based Reserving as the method by which life insurance company reserves are calculated

$0

$0

HB 4449

Including proximity detection systems and cameras used on continuous mining machines and underground haulage equipment for tax credit purposes

$0

unknown

HB 4496

Providing for the allocation of matching funds from future moneys deposited into the West Virginia Research Trust Fund

$0

$0

HB 4588

Protecting unborn children who are capable of experiencing pain by prohibiting abortion after twenty weeks

unknown

$0

HB 4619

Authorizing innovation school districts

$0

$0

And The Healthiest County is…Pleasants?

The 2014 County Health Rankings were released this week and in a bit of a surprise, little Pleasants County took top honors, while for the 5th year in a row, McDowell County earned the dubious distinction of the least healthy county in the state.

These rankings, compiled annually by the Robert Wood Johnson Foundation and the University of Wisconsin’s Population Health Institute, compare every county in each state based on a number of health outcomes (e.g. premature death, low birth weight) and health factors (e.g. health insurance, smoking rates, obesity rates).

There was some shakeup in this year’s rankings as Pleasants County (pop. 7,595) jumped from 7th in 2013 to 1st this year, displacing two-year reigning champ Monongalia County, which dropped to 2nd.  By and large however, the healthiest counties last year were the healthiest this year while the least healthy last year remain the least healthy again.

www.countyhealthrankings.org

Pleasants County was ranked as the healthiest county in West Virginia this year as McDowell County continues its streak of least healthy.  More information at www.countyhealthrankings.org

While the county aspect is interesting, I don’t think many people would be surprised by the overall trend.  The unhealthiest counties in our state tend to be the southern coal counties (which also tend to have the highest rates of poverty) and the healthiest tend to be where levels of education are the highest, like Mon County and the Eastern Panhandle.

Before all those folks up in the EP climb on their high horse, however, you should know that not a single county in West Virginia ranks in the top 10 percent of counties nationally in most of these measures, including smoking, obesity, premature death, health insurance, preventable hospital stays, physical activity, unemployment, or children in poverty. 

Yikes.

Ohio County has the lowest obesity in West Virginia, however it's still higher than the national average.

Ohio County has the lowest obesity of any county in West Virginia, yet it’s still higher than the national average.

So what purpose do these rankings serve?  Primarily, it helps illustrate the specific aspects in which our state is struggling by putting a numerical value on them.  Just like taking a practice test will help you see what material you need to work harder on, the county health rankings should help us recognize where our biggest deficiencies are. 

While our deficiencies seem to be pretty much everywhere, these rankings should provide the starting point by which we can 1) decide where to focus our limited resources, and 2) provide the yardstick to measure our efforts.

To do this, though, will require action, effort on the part of our state leaders.  Here’s to hoping folks will be willing to step up, be bold, and start driving this state toward a healthier future.    

Even though Putnam County has the lowest childhood poverty in West Virginia, it's getting worse in recent years.  Meanwhile, the rate of children across the state is substantially higher than the national rate.

Even though Putnam County has the lowest childhood poverty in West Virginia, it’s getting worse in recent years. Meanwhile, the rate of children across the state is substantially higher than the national rate.

Final FY 2015 Budget Comparison Available

The FY 2015 budget process took some twists and turns this year, with some big changes between the governor’s proposal, the house and senate versions and their final compromise, and the governor’s vetoes. Now you can compare all three versions of the budget in one place. This excel file lists each of the $12 billion in appropriations for FY 2015, comparing the governor’s original proposal, the enrolled version passed by the house and senate, and the final version after the governor’s vetoes. 

What was cut, what was increased, and what was vetoed can be answered with a glance. Download the file here, and check this post for a file comparing the FY 2014 budget with the FY 2015 proposal.

Governor Should Ignore Bogus “Flaws” in Minimum Wage Bill

On Sunday the Martinsburg Journal reported that attorney Brian Peterson with the law firm of Bowles Rice sent a memo to its clients warning of technical flaws and “unintended consequences” contained in HB 4283, which raises the state minimum wage from $7.25 to $8.75 an hour by 2016. Fortunately, many of the so-called “flaws” in the legislation are, in fact, good for working families and they align West Virginia code with other states. The bad news is that lobbyists who opposed increasing in the state’s minimum wage may use this memo as ammo to get Governor Tomblin to veto the bill (he has until Monday, April 1 to veto any bill).

In response, the National Employment Law Project has released a memo  outlining the problems contained in the Bowles Rice memo.

NELP 3.27.14 memo

The Legislature Gave, and the Governor Hath Taken Away

Governor Tomblin exercised his line item veto power today, trimming over $64 million from the budget sent to him by the legislature earlier this week. While the legislature had restored many of the cuts to children and family support programs that were in the FY 2015 budget proposal, the governor vetoed that funding, keeping the cuts in place. The governor also cut funding increases for the state police and for the expansion of an in-home senior service Medicaid program. 

Governor Tomblin originally called for borrowing $83 million from the Rainy Day fund, and the legislature increased that amount to $147 million in order to fund Medicaid. The governor vetoed that increase, and the final FY 2015 budget will borrow $100 million from the Rainy Day Fund for Medicaid. According to the governor’s veto letter, there will be additional funds available to appropriate to Medicaid at a later date. If this happens, it means that the Governor is really only vetoing $17 million – not the $65 million that is being reported.

Here’s how that works. In the governor’s proposed budget, Governor Tomblin appropriated $376.3 million for Medicaid through the Medical Services line item (Fund 0403, Activity 189), while transferring $83.8 million from the Rainy Day Fund into the Medicaid Trust Fund. Together, these actions provided $460.1 million for Medicaid.

In the compromise budget reached between the House and the Senate, $147.6 million was transferred from the Rainy Day Fund into the Medicaid Trust Fund, an increase of $63.7 million over the governor’s proposal. But the compromise also reduced the General Revenue appropriation for Medicaid to $312.6 million, a decrease of $63.7 million. So, like in the governor’s proposal, the two actions together provided $460.1 million for Medicaid, but the legislature’s action freed up $63.7 million in General Revenue, which they used to restore some of the governor’s proposed cuts and increase various line items. 

But, the governor vetoed the $147.6 million transfer, reducing it to $100 million. But, the governor can not use the line item veto to increase an appropriation, so the General Revenue appropriation for Medicaid remains at $312.6 million, $63.7 million below the governor’s proposal. The governor could reduce the Rainy Day transfer, but he can’t reverse the Medicaid line item reduction that the Rainy Day transfer offset. 

Since the vetoed transfer from the Rainy Day fund didn’t actually reduce any base budget appropriations, the Governor’s vetoes only cut $16.9 million out of the base budget ($12.6 million in General Revenue and $4.3 million in Lottery). 

2

The $16.9 million vetoed by the governor will presumably be funneled back into Medicaid (to help make up for the general revenue line item reduction). And the governor is counting on $26 million from the “haircut bill” to appropriate to Medicaid. However, these actions will still leave Medicaid about $5 million short of the $460 million it received from General Revenue and the Rainy Day transfer in the legislature’s enrolled budget, necessitating further budget maneuvers.

1

The stated reason for the vetoes was to ensure that the Rainy Day Funds (Revenue Shortfall Reserve Fund A & B) did not drop below 15 percent of the budget over the next three fiscal years.  Currently, the Rainy Day Funds hold “$914 million in cash” or about 21 percent of the FY 2015 general revenue fund budget.

According to the Governor’s veto letter, the budget bill passed by the legislature would grow the base-budget thereby increasing future budget gaps that would require additional revenue from the Rainy Day Fund. The projected budget gap in FY 2016 is $126 million, $44 million in FY 2017, and $0 in FY 2018. Of course, the Governor’s assumption is that the legislature would dip into the Rainy Day Fund over the next three years to fill these gaps instead of raising revenue by increasing the tobacco tax or other taxes.

Below is a list of all of the governor’s vetoes for the FY 2015 budget. 

Agency/Department

Line Item

FY 2015 Enrolled

Final With Vetoes

Vetoed Amount

General Revenue

 

 

 

 

WV Development Office

Regional Contracting Assistance Center

$375,000

$208,215

$166,785

WV Development Office

Local Economic Development Assistance

$4,688,940

$1,850,000

$2,838,940

State Department of Education

Current Expenses

$2,797,390

$2,627,390

$170,000

State Department of Education

21st Century Innovation Zones

$466,144

$266,144

$200,000

State Department of Education

21st Century Learners

$2,187,598

$2,062,598

$125,000

Department of Education and the Arts

Educational Enhancements

$350,000

$200,000

$150,000

Division of Health – Central Office

Primary Care Centers – Mortgage Finance

$343,505

$229,003

$114,502

Division of Human Services

Family Resource Networks

$1,762,464

$1,612,000

$150,464

Division of Human Services

Domestic Violence Legal Services Fund

$400,000

$370,000

$30,000

Division of Human Services

In-Home Family Education

$1,000,000

$750,000

$250,000

Division of Human Services

Grants for Licensed Domestic Violence Programs and Statewide Prevention

$2,500,000

$2,142,100

$357,900

Division of Human Services

Children’s Trust Fund – Transfer

$300,000

$220,000

$80,000

Adjutant General – State Militia

Unclassified

$16,710,103

$15,524,044

$1,186,059

Division of Corrections – Correctional Units

Corrections Academy

$1,602,129

$1,502,129

$100,000

WV State Police

Personal Services

$59,075,965

$58,568,052

$507,913

WV State Police

Childrens Protection Act

$947,942

$935,819

$12,123

WV State Police

Current Expenses

$11,219,232

$10,397,784

$821,448

WV State Police

Vehicle Purchase

$2,403,790

$1,500,000

$903,790

WV State Police

Communications and Other Equipment

$1,338,968

$1,268,968

$70,000

WV State Police

Trooper Retirement Fund

$4,625,240

$4,586,341

$38,899

WV State Police

Handgun Administration Expense

$81,668

$80,420

$1,248

WV State Police

Capital Outlay and Maintenance

$314,425

$250,000

$64,425

WV State Police

Automated Fingerprint Identification system

$704,920

$671,994

$32,926

Division of Criminal Justice Services

Child Advocacy Centers

$1,702,466

$1,502,466

$200,000

Division of Criminal Justice Services

Sexual Assault Forensic Examination Commission

$150,000

$100,000

$50,000

Bureau of Senior Services

Transfer to DHS for Health Care and Title XIX Waiver for Senior Citizens

$19,457,690

$15,957,690

$3,500,000

Higher Education

West Virginia University – Parkersburg

$10,081,330

$9,858,752

$222,578

Higher Education

West Virginia Advance Workforce Development

$3,645,095

$3,445,095

$200,000

Higher Education

West Virginia University

$103,099,869

$102,999,869

$100,000

WV Development Office

Regional Contracting Assistance Center

$375,000

$208,215

$166,785

WV Development Office

Local Economic Development Assistance

$4,688,940

$1,850,000

$2,838,940

State Department of Education

Current Expenses

$2,797,390

$2,627,390

$170,000

State Department of Education

21st Century Innovation Zones

$466,144

$266,144

$200,000

State Department of Education

21st Century Learners

$2,187,598

$2,062,598

$125,000

Department of Education and the Arts

Educational Enhancements

$350,000

$200,000

$150,000

Division of Health – Central Office

Primary Care Centers – Mortgage Finance

$343,505

$229,003

$114,502

Division of Human Services

Family Resource Networks

$1,762,464

$1,612,000

$150,464

Division of Human Services

Domestic Violence Legal Services Fund

$400,000

$370,000

$30,000

Division of Human Services

In-Home Family Education

$1,000,000

$750,000

$250,000

Division of Human Services

Grants for Licensed Domestic Violence Programs and Statewide Prevention

$2,500,000

$2,142,100

$357,900

Division of Human Services

Children’s Trust Fund – Transfer

$300,000

$220,000

$80,000

Adjutant General – State Militia

Unclassified

$16,710,103

$15,524,044

$1,186,059

Division of Corrections – Correctional Units

Corrections Academy

$1,602,129

$1,502,129

$100,000

WV State Police

Personal Services

$59,075,965

$58,568,052

$507,913

WV State Police

Childrens Protection Act

$947,942

$935,819

$12,123

WV State Police

Current Expenses

$11,219,232

$10,397,784

$821,448

WV State Police

Vehicle Purchase

$2,403,790

$1,500,000

$903,790

WV State Police

Communications and Other Equipment

$1,338,968

$1,268,968

$70,000

WV State Police

Trooper Retirement Fund

$4,625,240

$4,586,341

$38,899

WV State Police

Handgun Administration Expense

$81,668

$80,420

$1,248

WV State Police

Capital Outlay and Maintenance

$314,425

$250,000

$64,425

WV State Police

Automated Fingerprint Identification system

$704,920

$671,994

$32,926

Division of Criminal Justice Services

Child Advocacy Centers

$1,702,466

$1,502,466

$200,000

Division of Criminal Justice Services

Sexual Assault Forensic Examination Commission

$150,000

$100,000

$50,000

Bureau of Senior Services

Transfer to DHS for Health Care and Title XIX Waiver for Senior Citizens

$19,457,690

$15,957,690

$3,500,000

Higher Education

West Virginia University – Parkersburg

$10,081,330

$9,858,752

$222,578

Higher Education

West Virginia Advance Workforce Development

$3,645,095

$3,445,095

$200,000

Higher Education

West Virginia University

$103,099,869

$102,999,869

$100,000

Other Revenue

 

 

 

 

Revenue Shortfall Reserve Fund

Medical Services Trust fund – transfer

$147,552,295

$100,000,000

$47,552,295

Lottery

 

 

 

 

State Department of Education

Current Expenses

$3,653,750

$1,269,375

$2,384,375

Library Commission -Lottery Education Fund

Libraries – Special Projects

$786,250

$0

$786,250

Bureau of Senior Services

Senior Citizen  Centers and Programs

$2,284,740

$1,284,750

$999,990

Bureau of Senior Services

In-Home Services and Nutrition for Senior Citizens

$4,420,941

$4,320,941

$100,000

Total

 

 

 

$64,467,910

 

 

WV Legislature Gives 127,000 Working West Virginians a Raise

On the last night of the 2014 Legislative Session, West Virginia’s legislature passed HB 4283, raising the state’s minimum wage. The bill now goes to Governor Tomblin for his signature, making it law.

While we wait for the governor’s signature, let’s take a look at what passage of the bill means to West Virginia’s low-wage workers. The bill raises the minimum wage from $7.25 per hour to $8.75 per hour. That means, for full-time minimum wage workers, their annual pay will increase by $3,120, which for a family of two, is the difference between living in or out of poverty.

The bill passed by the legislature gives low-wage workers in West Virginia a raise in two steps. On January 1, 2015, the minimum wage increases to $8.00 per hour and on January 1, 2016, it increases to $8.75. We’ve looked before at who all would be getting a raise, so let’s now break it down by year.

In the first year, raising the minimum wage to $8.00 per hour will have a direct impact (those who currently earn less than $8.00 per hour) on about 37,800 workers. The average hourly wage for these directly affected workers is $7.45 per hour, and they work an average of 30.4 hours per week. That means that these workers will see an average annual pay increase of about $868, for a total statewide wage increase of $32.8 million.

In the second year, raising the minimum wage to $8.75 per hour will give those workers an average annual pay increase of $1,184, assuming they still average 30.4 hours per week and still make the minimum wage of $8.00. So for those 37,800 workers, the total impact after the wage increase is fully enacted is an average annual increase of $2,052, for a statewide increase of $77.7 million.

In addition to those 37,800 workers, raising the minimum wage from $8.00 to $8.75 in the second year will affect an additional 45,900 workers. These are workers who were already earning more than $8.00 per hour, but less than $8.75. These workers earn an average of $8.20 per hour and work an average of 35.3 hours per week, meaning they will see an average annual pay increase of about $1,010, for a total statewide increase of $46.3 million.

So, all told, after two years, 83,700 workers will get a raise, averaging an annual pay increase of $1,480. But those 83,736 workers aren’t the only ones getting a raise under the bill which also makes changes to the state’s tipped minimum wage. To avoid the messy details, the bill would increase the tipped minimum wage from $2.13 per hour to $2.40 per hour in 2015 and $2.63 per hour in 2016. This would affect an estimated 8,745 tipped workers, who would see an average annual pay increase of $426 in 2015 and another increase of $363 in 2016, based on average weekly hours.  That would equal a total average annual increase of $789 once the bill is fully in effect, for a statewide total of $6.9 million.

Aside from those directly affected by the wage increase, there will likely be spillover effects, as those who earn above $8.75 see a raise as the wage floor rises. We estimate that the spillover effects would impact about 34,600 workers. Assuming these workers see an average of a $0.50 per hour increase, they would see an annual average increase of $748, based on average wages and weekly hours, for a total statewide increase of $25.9 million.

So, to sum it all up, raising West Virginia’s minimum wage to $8.75 will give a raise to about 127,000 West Virginia workers. About 83,700 regular hourly workers will see an average annual pay increase of $1,480, while about 8,745 tipped workers will get a average annual pay increase of $789. In additional, 34,600 more workers could see a raise due to the law’s spillover effects, with a conservative estimate of an average annual increase of $748. Altogether, raising West Virginia’s minimum wage from $7.25 to $8.75 will increase wages in the state by an estimated $156.8 million.