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West Virginia state budget and finances

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West Virginia budget and finances
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General information
Budget calendar:
Annual
Fiscal year:
2015
State credit rating:
AA (as of 2014)
Current governor:
Earl Ray Tomblin
Financial figures
Total spending (state and federal funds):
$24 billion (estimated for 2014)
Per capita spending:
$12,868.00 (estimated for 2014)
Total state tax collections:
$5.4 billion (2013)
Per capita tax collections:
$2,901.45 (2013)
State debt:
$25 billion (as of 2014)
Per capita state debt:
$13,459 (as of 2014)
State budgets and finances
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Total state expendituresState debtTax policy in West Virginia
Note: This page utilizes information from a variety of sources. As such, the currency of the information varies somewhat. The information presented on this page reflects the most recent data available as of February 2015.
Between fiscal years 2013 and 2014, total government spending in West Virginia increased by approximately $1.6 billion, from $22.2 billion in fiscal year 2013 to an estimated $23.8 billion in 2014. This represents a 7 percent increase. The cumulative rate of inflation during the same period was 1.58 percent, calculated using the Consumer Price Indices for January 2013 and January 2014. As of 2014, financial services firm Standard and Poor's had assigned West Virginia an AA credit rating.[1][2][3]
In fiscal year 2014, West Virginia's estimated government spending per capita totaled $12,868, the third highest in the nation.

Spending

Definitions

The information below comes from the National Association of State Budget Officers (NASBO). These spending figures are broken into three broad categories in order to facilitate comparison between the states.[3]

  • State funds: State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."
  • Federal funds: Federal funds are "funds received directly from the federal government."
  • Total spending: Total spending is calculated by adding together the totals for state and federal funds.

These figures exclude spending from the sale of bonds.

2014 expenditures

See also: Total state expenditures

The table below breaks down estimated spending totals for fiscal year 2014 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[3]

West Virginia had much higher per capita spending in fiscal year 2014, at $12,868.00.

Total estimated state spending, FY 2014 ($ in millions)
State State funds Federal funds Total spending Population Per capita spending
West Virginia $19,398 $4,412 $23,810 1,850,326 $12,868.00
Kentucky $19,221 $9,614 $28,835 4,413,457 $6,533.43
North Carolina $30,996 $12,850 $43,846 9,943,964 $4,409.31
Tennessee $18,832 $13,231 $32,063 6,549,352 $4,895.60
Virginia $35,123 $9,568 $44,691 8,326,289 $5,367.46
Per capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census estimates.[4]
Source: National Association of State Budget Officers

Spending by function

See also: State spending by function as a percent of total expenditures
Breakdown of spending by function in FY 2013
Source: National Association of State Budget Officers

State spending in West Virginia can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2013 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.[3]

Over half of West Virginia's total budget was spent on what is defined in the table below as "Other" expenses. These expenses explained more thoroughly below the table.

State spending by function as a percent of total expenditures, FY 2013
State K-12 education Higher education Public assistance Medicaid Corrections Trans-
portation
Other
West Virginia 10.5% 13.7% 0.5% 13.5% 1.1% 5.2% 55.6%
Kentucky 19.6% 26.7% 0.9% 21.9% 2.4% 9.8% 18.8%
North Carolina 24.8% 12.4% 0.5% 30% 4.6% 10.7% 17%
Tennessee 17.8% 13.9% 0.4% 30.8% 2.8% 6.1% 28.2%
Virginia 15.1% 15.3% 0.4% 16.7% 2.8% 11% 38.7%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Spending trends

Between 2009 and 2013, a combined 22 percent of the state's total spending shifted from K-12 education and Medicaid to a category defined as "Other." See the table below for further details (figures are rendered as percents, indicating the share of the total budget spent per category).[3][5][6][7][8]

Spending by function from 2009 to 2013 (as percents)
Year K-12 education Higher education Public assistance Medicaid Corrections Transportation Other
2013 10.5% 13.7% 0.5% 13.5% 1.1% 5.2% 55.6%
2012 10.8% 14.1% 0.7% 12.7% 1.0% 5.8% 54.9%
2011 23.3% 14.2% 1.4% 23.5% 2.9% 8.3% 26.3%
2010 24.4% 13.2% 1.4% 23.0% 3.2% 9.1% 25.8%
2009 24.6% 13.3% 1.2% 21.4% 3.4% 8.0% 28.0%
Source: National Association of State Budget Officers
Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[3]

Revenues

2013 revenues

See also: State government tax collections by source

The table below breaks down state government tax collections by source in 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "population" and "per capita revenue" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "population" and "per capita revenue" have not been abbreviated).[9]

West Virginia collected about $5.3 billion from taxes in fiscal year 2013.

State tax collections by source ($ in thousands)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes Total 2013 population Per capita collections
West Virginia $6,149 $2,579,011 $137,437 $1,795,947 $242,429 $617,149 $5,378,122 1,853,595 $2,901.45
Kentucky $558,377 $5,110,456 $462,534 $3,722,964 $646,875 $314,556 $10,815,762 4,399,583 $2,458.36
North Carolina N/A $9,714,217 $1,543,201 $11,068,166 $1,285,907 $157,087 $23,768,578 9,848,917 $2,413.32
Tennessee N/A $9,128,175 $1,421,174 $262,842 $1,256,173 $298,527 $12,366,891 6,497,269 $1,903.40
Virginia $33,188 $6,192,666 $806,572 $10,900,860 $772,001 $481,566 $19,186,853 8,270,345 $2,319.96
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
West Virginia tax collections by source in 2013
Source: Tax Policy Center

The table below lists 2013 tax collections by source as percentages of total collections. Nearly half, or about 48 percent, of taxes collected in West Virginia came from sales taxes and gross receipts.[9]

State tax collections by source (as percentages)
State Property taxes Sales and gross receipts Licenses Individual income taxes Corporation net income taxes Other taxes
West Virginia 0.11% 47.95% 2.56% 33.39% 4.51% 11.48%
Kentucky 5.16% 47.25% 4.28% 34.42% 5.98% 2.91%
North Carolina N/A 40.87% 6.49% 46.57% 5.41% 0.66%
Tennessee N/A 73.81% 11.49% 2.13% 10.16% 2.41%
Virginia 0.17% 32.28% 4.20% 56.81% 4.02% 2.51%
Source: Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014

Current fiscal year budget

Fiscal year 2015

DocumentIcon.jpg See budget bill: SB 306

Governor Earl Ray Tomblin announced his fiscal year 2015 budget proposal on January 8, 2014. On March 19, 2014, Tomblin signed into law the fiscal year 2015 budget. The enacted budget totaled $22.2 billion in overall spending. The governor made a series of line item vetoes resulting in spending reductions totaling approximately $67 million.[10]

State debt

See also: State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, West Virginia had a state debt of approximately $25 billion. Its state debt per capita was $13,459. The report revealed that state governments faced a combined $5.1 trillion in debt. The obligation amounted to $16,178 per capita in the nation.[11]

Total state debt, 2014
State Total state debt State debt per capita Per capita debt ranking
West Virginia $24,972,461,000 $13,459 29
Kentucky $86,245,730,000 $19,689 11
North Carolina $107,580,297,000 $11,032 42
Tennessee $41,049,738,000 $6,358 50
Virginia $91,339,102,000 $11,158 41
Sources: State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014

Public pensions

See also: West Virginia public pensions and West Virginia public employee salaries

A 2012 report from the Pew Center on the States noted that West Virginia's pension system was funded at 58 percent at the close of fiscal year 2010, well below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[12]

The funding ratio for the state's pension system increased from 54.91 percent in fiscal year 2006 to 64.16 percent in fiscal year 2011, an increase of 9.25 percentage points, or 16.8 percent. Unfunded liabilities increased slightly in the same period, from $5.36 billion in fiscal year 2006 to $5.71 billion in fiscal year 2011.

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers.[13][14]

The table below lists the Standard and Poor's credit ratings for West Virginia and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[15]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
West Virginia AA AA AA AA AA AA AA- AA- AA- AA- AA-
Kentucky AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA-
North Carolina AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Tennessee AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA AA
Virginia AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA AAA
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Federal aid to state budget

See also: Federal aid to state budgets

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[16]

The table below notes what share of West Virginia’s general revenues came from the federal government in 2012. That year, West Virginia received approximately $4.3 billion in federal aid, 34.7 percent of the state's total general revenues. Figures from surrounding states are provided for additional context.[16]

Federal aid to state budgets, 2012
State Total federal aid ($ in thousands) Federal aid as a % of general revenue Ranking
West Virginia $4,267,399 34.71% 19
Kentucky $8,056,691 35.69% 14
North Carolina $15,192,577 33.24% 25
Tennessee $11,198,575 40.97% 3
Virginia $9,278,113 23.53% 49
Source: United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, West Virginia received $1.61 billion in federal stimulus spending between February 2009 and June 2013.[17]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[18][19]

  1. Budget instruction guidelines are sent to state agencies in July.
  2. State agencies submit budget requests in September.
  3. Agency hearings are held in October and November.
  4. The governor submits his or her proposed budget to the West Virginia State Legislature on or before the second Wednesday in January.
  5. The legislature adopts a budget in March or April. A simple majority is required to pass a budget.

West Virginia is one of 44 states in which the governor has line item veto authority.[19]

The West Virginia State Legislature is constitutionally required to pass a balanced budget. The budget must be balanced before the governor can sign it into law.[19]

Agencies, offices and committees

The following standing committees in the West Virginia State Legislature deal with budget and finance matters:

  1. Finance Committee, West Virginia House of Delegates
  2. Finance Committee, West Virginia State Legislature
  3. Finance Committee, West Virginia State Senate

Studies and reports

U.S. PIRG "Following the Money" report

See also: "Following the Money" report, 2014

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[20] According to the report, West Virginia received a grade of C and a numerical score of 72, indicating that West Virginia was "middling" in terms of transparency regarding state spending.[20]

Budget and finance ballot measures

See also: State and local government budgets, spending and finance on the ballot and List of West Virginia ballot measures

Ballotpedia has tracked 3 ballot measures relating to state and local budget and financial matters in West Virginia.

  1. West Virginia Amendment 1, Hunting and Fishing License Revenues Earmarked for Wildlife (1996)
  2. West Virginia Amendment 2, License Plate Revenues Earmarked for Wildlife (1996)
  3. West Virginia Future Fund Amendment (2016)

Recent news

This section displays the most recent stories in a Google news search for the term "West + Virginia + budget"

All stories may not be relevant to this page due to the nature of the search engine.

West Virginia state budget news feed

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Contact information

WV State Budget Office
Department of Revenue
Building 1, Room W-310
State Capitol Complex
Charleston, WV 25305-0171
Phone: 304-558-0040
Fax: 304-558-1588
http://www.budget.wv.gov/

See also

External links

Additional reading

References

  1. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  2. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 National Association of State Budget Officers, "State Expenditure Report: 2012-2014," accessed February 18, 2015
  4. United States Census Bureau, "State and County QuickFacts," accessed February 23, 2014
  5. National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  6. National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  7. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  8. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  9. 9.0 9.1 Tax Policy Center, "State Tax Collection Sources 2000-2013," June 20, 2014
  10. National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
  11. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  12. Pew Center on the States, "Widening Gap Update: West Virginia," June 18, 2012
  13. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  14. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  15. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  16. 16.0 16.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  17. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  18. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  19. 19.0 19.1 19.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  20. 20.0 20.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014