The Associated Press
Gov. Earl Ray Tomblin wants to increase West Virginia’s already robust emergency reserves, and hopes to win over lawmakers by also pledging funding for basic road needs and special infrastructure projects.
The proposal was among 13 introduced Friday on behalf of the governor for this session, which began Wednesday. One of those other measures would support the general revenue portion of the state budget by rerouting several taxes now earmarked for other purposes.
State law now requires that half of any annual budget surplus go into a so-called Rainy Day fund. These automatic deposits stop once that fund equals 13 percent of general revenue spending.
The fund has reached that target. It now has more than $565 million, one of the healthiest reserves among the states.
Tomblin’s Rainy Day legislation would increase the reserve’s target to 15 percent of spending. Once that new threshold is reached, half of any surplus would go into a new “Infrastructure Modernization and Development Special Revenue Fund” created by the bill. Each year, this new account would send half its balance to an existing program that funds water and sewer projects, and the other half to the chronically ailing State Road Fund.
The bill also earmarks interest from investing reserve funds for Medicaid. But a similar measure died last session, in a debate over whether recurring surpluses should instead trigger tax cuts.
The related measure would reroute revenues from taxes on corporate net income, insurance policies and coal and other extracted natural resources. Portions of these revenues now fund special purposes. The income tax money, for instance, has boosted efforts to improve railroad service in the state. Tomblin administration officials estimate that the bill would provide another $8 million annually for the general tax revenue portion of the state budget.