Thread by @tylerwwv

Last night, I was at @WVCBP’s “More Money for Who” presentation given by @sethano at the Ohio County Pubic Library. Here are some of the main take aways. @folkreporter #folkreporters 1/

Some brief background first:
-Personal Income Tax (PIT)- makes up 40% of WV’s annual revenue.
-Fiscal Year (FY)- ends June 30 and starts July 1, FY 2024 starts July 1.
-Flat Budget- roughly the same amount budgeted every year (no budget increases) 2/

-Severance Tax- taxes collected from coal and natural gas extraction, highly volatile.
- Education (higher ed and k-12 combined) make up about half of the annual budget. 3/

On to big take aways-
Earlier this year the Legislature passed a bill cutting PIT by 21.5%, and included triggers that, if hit, would reduce the PIT until it no longer exists.
This tax cut was built on WV’s “surplus”. WV doesn’t really have a surplus. 4/

The “surplus” is both manufactured by the governor and fueled by the highly volatile severance tax (about half). The governor has been underestimating budget estimates to keep the budget flat. The Legislature is bound by these estimates; it keeps the budget flat. 5/

The flat budget is actually a budget reduction, when inflation and rising costs are taken into account. Agencies are left with the same level of funding as the previous year, despite cost of operation rising. Years of flat budgets have let crises fester. 6/

By artificially lowering the budget, we’re spending less than we’re collecting, creating the “surplus”. 7/

Because the “surplus” is built on volatile revenue streams, it’s not good for permeant changes to revenue (like a tax cut). It’s better for one time expenditures, like roads, or grants to the numerous underfunded agencies. 8/

Aside from the tax cut being unsustainable, it also puts a significant dent in the “surplus”, which the legislature has been using to patch budget holes and to fund new spending. 9/

Even if the surplus was suitable for long term spending, it’s still hard to justify directing it to a tax cut, especially one that primarily benefits the wealthy. 10/

WV is:
#50 in teacher pay (and experiencing a teacher shortage)
#26 in service personal pay
#47 in pay for higher ed faculty
Our jails are understaffed
There is a social worker shortage
VFDs which cover 85% of WV haven’t seen a line item increase in 20 years.
The list goes on 11/

The tax cut isn’t going to drive growth. How do we know? History. Between 2006-2015 WV enacted $425M in cuts per year. It plunged us into a $500M deficit and didn’t bring growth. 12/

It’s likely that lawmakers are going to have difficulty putting together next year’s budget as severance revenues slow, and the effects of new spending and a decline in PIT revenue take effect. 13/

I will have a longer and more detailed story in the coming days. If this presentation comes to a place near you, I highly recommend attending. 14/

Graphics are from WV Center on Budget and Policy. 15/15

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