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What the Final 2017 Budget Looks Like and Where the Money Comes From

After their first attempt did not survive the governor’s veto, the legislature finally passed a budget for FY 2017 last week, bringing an end to the budget standoff and an extended special legislative session. While the legislature’s previous attempt relied almost entirely on the Rainy Day Fund and one-time transfers, the final version uses a mix of new revenue, directed transfers, and a smaller amount from the Rainy Day fund to close the $270 million gap. Here’s a brief overview of how the final budget differs from the governor’s original proposal.

On the revenue side, Governor Tomblin proposed several revenue options for the legislature to consider, including a $0.45/pack increase in the tobacco tax and a 1% increase in the sales tax. After initially failing to pass any revenue enhancements, the legislature passed a $0.65/pack increase in the tobacco tax, as well as tax increases on other tobacco products. The changes are expected to produce about $100 million in new revenue.

On the General Revenue side of the budget, the major difference from the governor’s proposal is in Medicaid, with less General Revenue funding for the health insurance program in the final budget than in the governor’s proposal. Instead, that funding will be made up with transfer from the Rainy Day Find and special revenue accounts.

The legislature also included a number of cuts throughout the budget, above the $160 million in cuts and adjustments in the governor’s proposal. These include cuts of $427,000 to the Department of Agriculture, $5 million from the Division of General Services, $2.5 million from the Development Office, $2.8 million from the Department of Education, $1.6 million from the Department of Education and the Arts, $786,000 from the Division of Juvenile Services, and $390,000 from the Department of Transportation, which includes the elimination of funding for the Public Port Authority.

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In the Lottery Funds, there were a few changes from the governor’s proposal. Cuts were made to the Division of Tourism for advertising, as a well as to the Division of Culture and History, including a $185,000 cut to fairs and festivals. Major changes to the Lottery Funds include reducing the transfer to the Infrastructure Council by $10 million and reducing the greyhound racing subsidies by $4.1 million, instead using the combined $14.1 million for Medicaid.

Other major changes from the governor’s proposal came from other and special revenue accounts. The final FY 2017 budget uses $70 million from the Rainy Day Fund and about $19 million in directed transfers from various special revenue accounts. These funds, too, are used for Medicaid, reducing the General Revenue appropriation, and for the newly created PEIA stability fund, to help offset PEIA premium increases. $15 million was appropriated for the PEIA stability fund.

A line-by-line comparison of the final FY 2017 budget with the governor’s proposal can be downloaded here: fy17 final

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