FY 2014 Budget Update

On April 17, 2013, the West Virginia legislature passed the Fiscal Year 2014 budget. Only minor changes were made to Governor Tomblin’s $11.3 billion proposal, which was introduced at the start of the legislative session, with the final budget only $2.0 million smaller than the governor’s proposal, a reduction of 0.02 percent. The FY 2014 budget represents a total decrease of $203.1 million below the FY 2013 budget.

The state’s budget includes both state and federal appropriated funds. State appropriations, which include General Revenue, Lottery funds, Special Revenue, and the State Road Fund, totaled $7.2 billion, while appropriations from federal sources totaled $4.1 billion. Figure 1 breaks down these funding sources for the FY 2014 budget.

School Aid Formula Adjustment Drives Base Budget Changes

The state’s base budget, its primary source of discretionary spending, is made up of the General Revenue, Lottery, and Excess Lottery funds. The FY 2014 base budget totals $4.45 billion, which is $4.75 million less than the governor’s proposal, a decrease of only 0.1 percent (Table 1).

Table 1

FY 2014 Base Budget Changes from Governor’s Proposal

Source: WVCBP analysis of WV State Budget Office Data

As Table 1 shows, the changes made by the legislature to the governor’s proposal were small and concentrated in the General Revenue Fund. While some minor changes were made to the Lottery Fund, the overall total remained the same, while the General Revenue Fund was reduced by $4.75 million. One of the biggest changes to the General Revenue Fund was a $4 million reduction to the Supreme Court’s appropriation, which was requested by Governor Tomblin after the Supreme Court revised its initial request.  The West Virginia Development Office also saw its appropriation reduced by $2.6 million, a 12.8 percent decrease.

Other changes to the base budget were the result of changes to the school aid formula. The school aid formula determines the amount of money the state sends to the local school districts each year. Estimates for education costs increased by $6.3 million since the governor’s proposal, but the estimate for the local district’s share (which is determined by local property tax revenue) also increased by $15.6 million. As a result, the state’s appropriation declined by $9.2 million, freeing up money for other areas of the budget. This resulted in small increases for Medicaid, public safety, education, and higher education from the governor’s proposal.

Supplemental Appropriations

During the legislative session the Legislature can pass supplemental appropriations, which are bills that increase spending authority above the levels contained in that year’s budget. While a supplemental appropriation raises the “spending ceiling” of an item in the budget, it does not mean that the amount of the supplemental appropriation will be spent in this fiscal year, only that the amount authorized to be spent has been raised. Supplemental appropriations are typically made when an item requires immediate funding and is too urgent to postpone until the enactment of the next year’s budget.

Table 2 lists the supplemental appropriations passed during the 2013 Regular and 1^st Special Sessions.

Table 2

FY 2013 Supplemental Appropriations

Source: West Virginia Legislature 2013 Session

Bills Passed With Fiscal Impact

The Legislature passed 216 bills during the 2013 Legislative Session. 69 of those bills came with fiscal notes attached. Fiscal notes are 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. Of the 69 fiscal notes, 23 identified a measurable fiscal impact to the state, while another eight were unable to provide an estimate. These fiscal notes are listed in Table 3. The remaining fiscal notes found no fiscal impact.

 Table 3

Bills Passed with Fiscal Impact

Source: West Virginia Legislature 2013 Session