On the Ropes

West Virginia was forced to take nearly $18 million out of its Medicaid reserve fund in order to avoid ending its fiscal year on Sunday with a budget deficit. A $45 million special account for paying income tax refunds was also drained, and the Legislature had already cut $28 million from current spending.

But with Gov. Earl Ray Tomblin signing an executive order that would have allowed for up to $20 million to be pulled from the Medicaid reserve fund, in order to offset the general revenue shortfall, it leaves questions as to how the state will bear the burden of greatly increased Medicaid spending under the “Obamacare” mandate.

Medicaid already puts enormous pressure on West Virginia’s budget. Now, acting Revenue Secretary Jason Pizatella will have to ask legislators to find a way to “restore what we’ve cut the next time they convene.” The Legislature will likely find it very difficult to come up with money to fill such a gaping hole.

President Barack Obama’s war on coal has just begun to take its toll on West Virginia. Declining coal production means severance taxes on coal and other extracted resources were down nearly 10 percent during the just-ended fiscal year.

That is the beginning of a domino effect in which sales and use taxes in West Virginia were down nearly $16 million, and income tax collection stayed out of the red only because of that $45 million transfer from the state’s special account.

West Virginians need no longer wonder if Obamacare and the president’s war on coal will be devastating one-two punches.

Now, the only question is how – or if – we can find a way to get off the ropes onto which we’ve been knocked.