Unless tax collections pick up, there will be no “happy New Year” in Charleston. Instead, there will be notices going out to state agencies that they must cut spending for the remainder of the fiscal year, ending June 30.
Once again in November, revenue flowing into West Virginia’s general fund was below estimates used to set the budget. Just five months into the year, tax collections are running $57.4 million behind predictions.
At that rate, the state’s general fund could be nearly $130 million in the red by June 30.
That cannot be allowed to occur, so Gov. Earl Ray Tomblin is considering an order that state spending be reduced.
“We’ll take corrective action. It’ll be painful but it’ll bear fruit,” Charles Lorensen, Tomblin’s chief of staff, said last week.
It is possible revenue collections, specifically from the severance tax, will rebound in December. Tomblin and other state officials should not count on that. The existing $57.4 million shortfall probably cannot be made up.
The sooner Tomblin decides on a course of action, then, the better. The longer he waits, the deeper the fiscal hole out of which state agencies will have to climb.
No later than Jan. 1, then, Tomblin should take whatever action is necessary to keep the budget in balance.