Tough decisions on possible budget cuts

August 28, 2013

After several tough financial years, many state governments report that 2013 is turning out a little better than expected, but the forecasts for the years ahead are bleaker.

That includes the outlook for West Virginia.

A new report from the National Conference of State Legislatures shows that overall state revenues are up about 5.3 percent for 2013, helped by taxpayers who accelerated payments on their capital gains because of increases in the fiscal cliff legislation. Some states also implemented tax increases, such as higher gas taxes or changes to collect sales tax on online sales.

But the economic recovery continues to be slow, and many states worry that rising Medicaid costs and other expenses will outpace revenue growth next year, the NCSL survey shows.

In West Virginia, Department of Revenue Secretary Bob Kiss has instructed all state agencies to prepare two budgets — one in line with their current spending and another with a 7.5 percent reduction.

The cuts are not definite, but Kiss wants agencies to be prepared to reduce spending if necessary. Some officials feel the 7.5 percent reduction, similar to last year’s cuts, is all but inevitable.

As with other states, rising Medicaid costs — unrelated to the expansion planned under the federal Affordable Care Act — are a big factor. …

A few areas would likely be exempt from cuts, including the school aid funding formula, funding for correctional units, the veteran’s nursing home fund and debt service. Unfortunately, higher education is not on that list.

As readers know, Marshall University struggled to deal with a $5 million cut in state funding this year, and further cuts would likely mean more tuition and fee increases passed along to students and their families. For a state that needs to increase the education of its population and work force, making it more difficult to finish school certainly seems shortsighted.

There are a lot of tough decisions ahead, but we urge state leaders and educators to work hard to keep higher education affordable.

— Herald-Dispatch, Huntington