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W.Va. ends year with budget surplus

CHARLESTON — For a budget that he wouldn’t sign over 12 months ago, Gov. Jim Justice was pleased the state ended the fiscal year with a surplus.

According to the state Department of Revenue, West Virginia finished fiscal 2018, which ended June 30, with $20.2 million ahead of estimates. Total net collections for the fiscal year was $4.245 billion, which Justice called the “highest general revenue collection in state history.”

“The last time the state finished a budget cycle with a surplus without mid-year cuts was in 2012,” Justice told reporters at a press conference Monday.

Personal income tax revenue was up by $60 million above estimates, insurance premium tax collections were up by $3.1 million and corporate net income tax revenue was up by $1.1 million. Consumer sales tax collections came in 2 percent above last year’s revenues and more than 99 percent of the estimate for the year, and severance tax revenue came in at 7.8 percent ahead of last year’s numbers and nearly 96 percent of the estimate for the year.

“Revenue growth was roughly 2 percent more than $78.7 million for the year prior to any adjustments for various one-time special revenue transfers, and otherwise up 3.7 percent,” Justice said.

After more numbers come, Revenue Department officials say the end-of-year surplus could be more than $28 million. The state still has $1.5 million in unappropriated surplus for the year, and expenditure expirations that could be as much as $10 million.

By law, half of any surplus gets deposited in the Rainy Day Fund.

The fiscal 2018 budget didn’t come together without a fight, though.

The state was looking at a $497 million gap to balance the 2018 budget. Justice’s first budget proposal, House Bill 2018, looked to raise several taxes including the sales tax, soda and tobacco taxes. It also included $26.6 million in spending cuts. The bill was introduced at the start of the legislative session in February 2017.

The Legislature passed its version of the budget bill in April 2017. That budget contained no tax increases and cuts to the Department of Health and Human Resources and higher education and a $90 million withdrawal from the Rainy Day fund. Justice, during a press conference, vetoed that budget that was underneath a pile of cow manure on a silver platter.

“We should all take ownership of this, but what we have is nothing more than a bunch of political bull-you-know-what,” Justice, then a Democrat, said of the budget bill before vetoing it.

Later that spring, the Legislature was called into special session to begin anew on a budget for fiscal 2018. That budget spent $85 million less than the prior year’s spending, had no tax increases and cut the higher education line item by a lesser amount than the previous budget attempt.

The budget was passed in June 2017 only weeks before it was to take affect with the new fiscal year. Justice allowed the budget to become law without his signature.

“I think we have a travesty,” Justice said at the time. “As best as I can tell you from the bottom of my heart, I can’t sign this. Because of the pain it’s going to cause so many people, and the direction that it puts us in basically solving none of our problems.”

In a statement last week, Delegate Eric Nelson, R-Kanawha, chairman of the House Finance Committee, credited the improved end-of-year budget numbers to lawmakers holding strong on no tax increases.

“This Legislature deserves a tremendous amount of credit for holding our ground to control government spending and not pass the buck onto our citizens and businesses by hiking their taxes,” Nelson said. “Our combination of pro-growth policies combined with our fiscal restraint is now reaping dividends for our state. The fact that we are now talking about surpluses instead of deficits is clear evidence we are turning this state in the right direction and that our best days are to come.”

Now over a year after letting the budget go into law without his signature, Justice said the positive improvement in the state’s finances and economy gives West Virginians and those wanting to do business in West Virginia something positive to see.

“When you’ve looked at West Virginia as dark, dingy, dirty and maybe backward for years and years and years, and all of a sudden you see this state moving, that image of bad stuff erodes, and good stuff starts to happen,” Justice said. “Hope comes back, and hope is a powerful thing.”

(Adams can be contacted at sadams@newsandsentinel.com)

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