Lawmakers dig into Justice administration’s budget proposal

West Virginia’s Senate Finance chairman expressed concern that some Justice administration spending proposals characterized as one-time allocations could instead blossom into ongoing expenses.

Gov. Jim Justice’s financial team is proposing a general fund budget of $5.22 billion, a figure that includes a few proposed tax cuts along with spending increases such as pay raises for state workers.

Administration officials have said their proposed budget has enough cushion for one-time expenditures as the fiscal year progresses.

Now it’s up to the Legislature to begin assessing those proposals for potential allocation. Senate Finance Chairman Eric Tarr, in a Thursday morning meeting, pressed for justification of some of the spending items.

“In the supplemental package, it looks to me like many of those items have the propensity to become base-building items,” said Tarr, R-Putnam, referring to pressure that could build if agencies adjust to additional money being available.

The budget proposal sees a number of supplemental appropriations based on revenue over estimate for the current fiscal year.

Those one-time expenditures include $200 million for the School Building Authority, $53 million for two psychiatric hospitals, $30 million for the Nursing Workforce Expansion initiative, $10 million for the Posey Perry Emergency Food Fund and $5 million for a charter school seed fund.

For the coming fiscal year, additional surplus spending proposals include: $20 million for senior centers and programs, $5 million for the Military Ascend program to encourage veterans to live in West Virginia, $1 million for various veterans home improvements and more.

Tarr wanted to know the administration’s perception of whether some of those expenditures could be perceived as locked in for future years, too.

Acting Revenue Secretary Larry Pack responded that he was not equipped with a budget number that might fit that description, but promised to assess the matter more fully and report back to the
committee.

State officials are also working through how to deal with a multi-million dollar gap for West Virginia’s Medicaid expenses.

The administration will support legislation to raise taxes on managed care organizations that carry out programs for Medicaid. That step is meant to counter millions of dollars in increased state costs for the Medicaid program, which is in partnership with the federal government.

The financial move could bring in $114 million to help meet the Medicaid gap.

In addition, administration officials are proposing a $40.6 million supplemental expenditure for Medicaid. The supplemental appropriation is viewed as an alternative if the increased tax on managed care organizations would stall out legislatively.

Tarr expressed concern that the $40 million piece could snowball into an ongoing expense, rather than a one-year appropriation.

“Do you agree that that’s accurate?” Tarr asked.

Pack suggested connecting with Cynthia Persily, secretary of the West Virginia Department of Human Services, for a more detailed explanation of the options and their potential financial
consequences.

Tarr next asked about a $5 million proposed allocation to the Ascend program that is meant to encourage people to move to West Virginia.

“It is a successful program,” Tarr said, “but that also looks, even though it’s in the surplus section of the budget, something that has the propensity to be a base item.”

Pack agreed, saying “I think I would concur with that, yes sir.”

Similarly, a supplemental appropriation to the Communities in Schools program could be a base-building expense, Tarr suggested. Same with $3 million for pregnancy centers. And $10 million to support emergency medical technicians has potential to extend beyond a one-year expense.

Finally, Tarr asked about the $10 million for the Posey Perry Emergency Food Fund. The emergency fund is a tribute to the late Posey Perry, a longtime coal miner who also volunteered at food pantries for a number of years. Justice has regularly paid tribute to Perry, his mother’s brother.

“It was sold to me as finance chair that it was going to go to a warehouse that was to store food and create jobs around feeding the homeless,” Tarr said.

“But when we passed it through the Legislature what came out is, that the governor’s passing out food across the state with it instead of having it where we stockpile that food and create the jobs there for the people who really could be trained to have jobs and maybe not have hunger situations.”

The senator said he was trying to figure out “where the misrepresentation was to me before we went in and put the $10 million the first time to Posey Perry.”

Pack responded that he could not characterize how that program was presented in the first place. But he said he and the governor feel strongly about food programs for the less fortunate.

“This money was designed in the governor’s mind and in my mind to help the food pantries, not the food banks. Food pantries are mostly our local churches. A lot of times it’s Posey Perry, people like that, out in the country and once a week people come and they get food. I’m sure there’s some abuse out there somewhere. I think the abuse is very, very small.

“The governor’s belief is that if we have a $5 billion budget then we can take some percentage and help the hungry. There may be better ways to deliver it. That’s something we can always have a discussion about.”

Sen. Eric Nelson, R-Kanawha, a former finance chairman in the House of Delegates, asked about longer-term financial projections that state officials could use for planning. In recent years, such multi-year projections have not been provided by the executive branch.

“We used to have a historical projection going forward,” Nelson said. “What is the stance of the governor on providing this body some type of future projection, whether it be three, four, six years like we used to do.”

Pack noted that he has only been in his current role for a few weeks and said he would follow up. “I’ve been working really hard to get the information to get you today and not really focused on anything in future years,” he said.