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If you are concerned about the future of West Virginia, join the Protect West Virginia coalition today!
Throughout the next couple of months, WVCBP staff will talk to dozens of organizations across the state about West Virginia's fiscal condition: specifically how the state can fix its upcoming budget gap, estimated to be at least $300 million next year.
Who pays taxes in West Virginia? What makes up our tax base? To help break it down, we've created this new two-pager to help explain.
Want to learn more about West Virginia's budget process and how we can protect important programs like higher-ed and our K-12 schools? Give us a call and we'll do a presentation for your organization, civic group or club. Contact Tara for more information.Download PDF of report.
Payday loans notoriously carry 300+% APR (annual percentage rate). Strategically located in low-income neighborhoods, payday lenders intentionally trap borrowers in debt that they cannot escape. The average payday borrower is trapped by ten transactions in a year.
Though payday lenders are not allowed in our state, we still need a strong national rule. Payday lenders will use a weak rule to seek a green light to come back into West Virginia.
Thank you so much for acting today.
The state budget directly affects everyone living in West Virginia.
It is the one law that makes state government function. It defines how we plan to use our resources to do the things together that cannot be done alone, such as creating good schools for our children, protecting the environment, making our communities safe, making car travel possible, and ensuring that our constitutional rights are protected. The items contained in the budget not only reveal the important public structures that improve our quality of life but also reflect what our priorities are as a state.
The West Virginia Center on Budget and Policy has published this guide to give citizens insights on the fiscal decisions that shape their daily lives. Greater understanding and involvement means greater citizen participation in setting our priorities as a state. The guide is aimed at a general audience and would be a good resource for government classes, civic clubs, nonprofit organizations, and policymakers.
Read "Your Guide to the State Budget" here.
For your free copy, email email@example.com.
Governor Tomblin’s plan for closing an estimated $381 million budget gap for the current fiscal year (FY 2016) and a $466 million shortfall for the 2017 state budget (FY 2017) includes a mix of spending cuts and budget reductions, as well as tapping the Rainy Day Fund, using surplus and one-time revenues, and raising taxes on tobacco and telecommunications services. These large projected budget gaps come on top of a $195 million budget shortfall that was closed last year in the 2016 budget. Read PDF of report.
The state’s consecutive budget gaps derive from many factors, including significant tax cuts implemented over the last decade, the state’s weak economy over the last two years – especially in the energy sector - and growth in its Medicaid program.
The governor’s recommended 2017 base budget (general revenue and lottery funds) is approximately $4.682 billion, only $1.6 million more than the 2016 base budget appropriations enacted last spring. After the governor’s across-the-board cuts of four percent or $94.3 million in the 2016 budget, the governor’s 2017 base budget plan is only $92.7 million more than the current 2016 base budget.
While the governor has taken some positive steps this year – including a more balanced approach that includes additional tax revenue, funding to help partially close the $120 million shortfall in PEIA, and resourceful ways to utilize one-time revenue – the state still has many unmet needs that require additional revenue to improve the state’s long-term growth and fiscal health.
This brief will examine both the governor proposals for the 2016 budget and the 2017 budget, along with exploring the impact of recent and possible future budget cuts, and the underlying factors that are driving the state’s fiscal gaps. The brief will also explore steps policymakers can take to ensure that the budget not only provides a better foundation for economic prosperity but that it also protects vulnerable children and families and helps push more people out of poverty.
• The governor’s plan for closing the estimated $381 million budget gap for 2016 includes $94.3 million in across-the-board spending cuts and $287 million in revenue from various sources, including the Workers’ Compensation Debt Fund, surplus revenue funds, the Revenue Shortfall Reserve Fund A, excess cash, and tax modest increases.
• To close the estimated $466 million 2017 budget gap, the governor proposes a mix of tax increases, spending cuts, and budget reductions – including $152 million in new revenues and $77.1 million in cuts to programs and services.
• The large budget gaps are mostly due to the erosion of the state’s tax base from tax cuts enacted between 2007 and 2015 and the state’s weak energy sector, which has lead to lower severance tax collections. If general revenue fund investments as a share of the economy were at the two-decade average, the state would have an estimated $465 million in additional revenue.
• The Affordable Care Act also helped save the state nearly $15 million in the 2017 budget, despite growing Medicaid costs.
• The state’s budget woes over the last few years could have been much worse had it not been for declining student enrollment in public education and increases in property taxes from shale development.
• While raising the tax on tobacco products is a move in the right direction, the tax increase needs to be high enough to curb health care costs and save lives. Similar to the proposed sales tax on telecommunications, it is also regressive, hitting low-income people the hardest.
• Since 2008, the state has reduced higher education investment by over $120 million, after adjusting for inflation. Meanwhile, tuition at the state’s four-year colleges has grown by 32.4 percent during this time period, shifting costs to students and potentially jeopardizing quality at our public universities.
• To improve the state’s fiscal health and its economy, policymakers need to consider additional revenue sources. Otherwise, the state will continue to underinvest in its workforce and diminish its ability to provide long-term economic growth and improve the health of its communities.
As of January 1, the West Virginia Department of Human Resources (DHHR) has added a so-called work requirement to the Supplemental Nutrition Assistance Program (SNAP). Under the policy, adults aged 18 to 50 with no dependent children must participate in a work or educational activity for a monthly average of 20 hours per week in order to maintain SNAP eligibility, with some exceptions. In West Virginia, there are about 37,000 adults who could lose SNAP benefits from this policy change.
Federal law limits able-bodied adults to three months of SNAP out of every three years unless they are working at least 20 hours a week, participating in a work training program at least 20 hours a week, or participating in some other workfare program. States can request a waiver of these limits in areas of high unemployment, and most states waived the time limit statewide during the recession and slow recovery. Now WV's DHHR is letting the waiver expire for nine West Virginia counties.
Unemployment in West Virginia has risen sharply in the past year, even as it had never fully recovered from the recession. Now the state has one of the highest unemployment rates in the nation, and, according to the Bureau of Labor Statistics, there are more than 39,000 fewer West Virginians employed now than there were before the recession.
Even in the nine counties chosen by DHHR to let the waiver expire, the economy has not fully recovered. While they were chosen because their unemployment rates are low, there are more unemployed workers and fewer employed workers in those nine counties than there were before the recession.
With the slow recovery contributing to a weak job market in West Virginia, many people have trouble finding enough to eat. The share of households in West Virginia experiencing food insecurity has grown from 8.8 percent in the early 2000s to 15.3 percent in 2012-2014, a full percentage point higher than the national average, while nearly one in five West Virginians is living in poverty.
With fewer West Virginians working than before the recession, even in the counties with the lowest unemployment rates, it's clear that many still need help while they search for jobs. But DHHR has decided to limit SNAP for able-bodied, childless adults to just three months of basic food assistance during a three-year period if they aren't working in nine counties.
To be clear, the policy change is a time limit, not a work requirement. Calling it a work requirement suggests that it encourages people to look for work and provides a training or workfare position to everyone subject to the time limit. However, individuals working up to 20 hours per week and those looking for work are still terminated from SNAP after three months. An able-bodied adult without dependents must work 20 hours a week, participate in a job training program for 20 hours a week, or perform workfare in order to receive more than three months of benefits.
While DHHR has suggested that there are sufficient slots in employment and training programs to accommodate all of the recipients who may need them in order to maintain SNAP eligibility, as WVCBP friend Betty Rivard asks, it is unclear whether recipients will have the transportation they need, or the type of training that improves their skills and moves them toward available jobs. Further, administering the provision is a complex and difficult task. Identifying who on the caseload is qualified, screening for exemptions, tracking months of participation, and monitoring hours worked and participation in training programs requires new systems, forms and notices as well as substantial training and support of eligibility workers. States need time and resources to prepare.
Those at risk of losing their SNAP eligibility are an extremely poor and vulnerable group. Individuals subject to the three-month limit have average monthly income of approximately 17 percent of the poverty line (or about $2,000) and over 80 percent have incomes below half of the federal poverty line, and they typically qualify for no other income support. Many face significant barriers to work, such as returning from military service, homelessness, felony convictions, a lack of transportation, or lack of a high school diploma.
Food benefits are paid for with federal dollars and are already very modest, averaging about $150 to $170 per person per month for this group. Denying these benefits to the unemployed will do nothing to create new jobs and will not save the state any money. What it will do is increase food hardship and the burden on local food banks struggling to serve the hungry. People who will be cut off from food assistance because of this rule are some of the poorest people in the state who, for the most part, are not eligible for other types of assistance. Now, it will be harder for them to eat.
Most West Virginians would likely agree that it is unfair—not to mention uncompassionate—to deny food assistance to someone who is searching for a job, but is unable to find one because of a shortage of jobs. But that is exactly what the administration's policy change is poised to do.
West Virginia Tax Policy & Shared Prosperity: Recommendations to Joint Select Committee on Tax Reform
On October 20, 2015, WVCBP Executive Director Ted Boettner testified before the Joint Select Committee on Tax Reform to recommend tax policy options that would help build a shared prosperity and address West Virginia's chronic budget shortfall and cuts to programs such as higher education. Ted's presentation can be found here.
Overhauling West Virginia’s tax system is on the agenda of the leadership of the West Virginia legislature. As citizens and stakeholders of West Virginia, we appreciate this effort and the thoroughness with which the Joint Select Committee on Tax Reform has investigated the many issues involved. Read PDF.
A diverse coalition of organizations that cares about kids, families, seniors and working people, community organizations and local governments has come together to support the following basic principles of fair taxation which we urge legislators to consider as they deliberate changes to the tax code:
1. Any new tax proposal should not jeopardize schools, roads, colleges, kids, or seniors. This includes protecting services for vulnerable West Virginians.
2. Any new tax proposal should include accountability measures for tax breaks or credits so we know they are working.
3. Any new tax proposal should not increase taxes on low- and middle-income families; in West Virginia, we already have an upside-down tax structure where working families are forced to pay more than their fair share.
4. Any new tax proposal should consider new and alternative sources of revenue to pay for urgent needs such as infrastructure, education and human services.
5. Any new tax proposal should avoid changes to revenue generation that would short-circuit the democratic process and weaken the state’s ability to meet future needs.
On May 20, 2015, WVCBP Executive Director Ted Boettner took part in a legislative briefing in Columbus, Ohio sponsored by the Multi-State Shale Research Collaborative and Ohio Assembly members Jack Cera (District 96) and Michele Lepore-Hagan (District 58) to discuss how Ohio can maximize benefits and minimize costs in shale drilling in Ohio.Ted's presentation explored how states like Ohio can create permanent natural resource trust funds to ensure long-term benefits of shale drilling.
On March 19, 2015, WVCBP Executive Director Ted Boettner was part of the Shale Symposium sponsored by the Federal Reserve Bank of Cleveland at Wheeling Jesuit University. The symposium covered early shale development, shale's growth-to-boom phase, and its declining development-to-bust phase. Ted's presentation was titled "A Softer Landing - Fighting the Resource Curse" and described how creating a permanent mineral trust fund can help a state plan for a future after its energy reserves are depleted. View it here. For more on the event and other speakers who attended, visit here.