The West Virginia Legislature has a single required duty when it meets each year -- pass a balanced budget. When the regular session began in early 2017, the revenue available for funding state programs had dropped to $4.05B, approximately $500M less than was spent in the previous fiscal year. Against this backdrop, Governor Justice proposed a number of new revenue sources and programs, few of which got any traction. Being in no mood to raise new revenues, the Legislature was prepared to force the state to “live within its means” by drastically cutting programs and services. But on June 13, at the proverbial last minute, the Governor sent a letter to the Speaker of the House of Delegates with a revised revenue estimate of $4.225B. This higher revenue estimate enabled the Legislature finally to pass a budget without hyper-cuts to state programs. But the estimate was based on wishful thinking and may force the Legislature to confront an even larger deficit next fiscal year.

The soap opera in Charleston appears to be over. After failing to come together on any meaningful changes for increasing revenues or reforming the tax structure, the Legislature adopted a “bare-bones” budget that cuts more deeply than ever into valuable state programs. This was a default to the lowest common denominator and a failure of statesmanship. It defers many important questions for a later Legislature. One Delegate said that the budget was the result of “complete and utter dysfunction.” It wasted everyone’s time and money. While there is blame to go around, this result was the product of opposing positions taken by members of the same political party. Senate Republicans insisted that there would be cuts to personal income taxes or nothing. House Republicans insisted on broadening the sales tax base and were suspicious of income tax cuts in a deficit environment. Week after week neither side moved. The Democrats were impotent on the sidelines and the Governor lurched from one folksy hyperbole to the next, offering some bone-headed proposals of his own. The whole process was a disgrace.

Remember the large budget deficit that confronted West Virginia lawmakers at the start of the legislative session? One estimate in November 2016 was that in FY 2018 (beginning July 1, 2017) we would generate only $4.055 billion in revenue, roughly $500 million short of anticipated spending. That brought many legislators to Charleston for the general session prepared to strip spending down to a bare minimum and force the state “to live within its means.” Fortunately, those views softened when confronted by political reality. Now projected FY 2018 revenues are about $40 million better than first predicted due to an improving coal market and a $33 million transfer from general revenues to the Workers Compensation Fund that won't be made. But the remainder of the budget shortfall hasn’t disappeared. How the shortfall will be closed is the subject of a House and Senate conference committee meeting today. So far, the fiscal and political stress created by the shortfall has caused Governor Justice and quite a few legislators to behave as if any idea – even a demonstrably bad one – is better than nothing.