CHARLESTON, W.Va. (AP) — West Virginia’s budget gap has topped $60 million as low energy prices continue to dampen tax collections.
September’s tax collections missed estimates by $55.5 million, which pushed the deficit for the fiscal year’s first three months from $12 million at the end of August to $67.8 million, the West Virginia Department of Revenue said in a news release.
The deficit is projected to grow to $250 million by the end of the fiscal year.
Revenue Secretary Bob Kiss attributed the decline to low energy prices that have eroded severance tax collections, which were more than $43 million below estimates for the fiscal year’s first three months.
The Department of Revenue said low energy prices also hurt income and sales tax collections.
On Monday, Gov. Earl Ray Tomblin told most state agencies to cut spending by 4 percent to help close the gap.
Kiss told The Charleston-Gazette Mail that the cuts will make it difficult for agencies to provide services following previous spending reductions in the past three years.
“If you turn to these agencies, that now have seen several years of successive cuts, we believe we’re getting to the point where it’s going to be a close-run game, in terms of the delivery of services and programs,” Kiss said. “It’s going to be a struggle for them to perform their mission.”
Kiss said the latest cuts will affect programs that previously had been spared, including the state’s Medicaid program and public school funding.
“There’s much more being exposed in these cuts than was exposed in the prior cuts,” he said. “Because of the magnitude of the cuts needed, there are things included in these cuts that were not there in the past several years.”
Health and Human Resources Secretary Karen Bowling told the newspaper that her agency is reviewing its options for cutting Medicaid and other programs.