The Register-Herald, Beckley, West Virginia

Today's Front Page

February 14, 2013

Proposed $4.6 billion budget includes penny-pinching, but no tax increases

By Mannix Porterfield Register-Herald Reporter

CHARLESTON — Medicaid spending, saddled with a decline in coal mining and a generally anemic economy, prompted Gov. Earl Ray Tomblin to produce a proposed $4.6 billion state budget Wednesday that calls for no tax increases but relies on penny-pinching in government.

Using a variety of graphs, budget director Mike McKown told reporters the administration must come up with an extra $142 million to maintain current Medicaid spending, since the state’s share has gone up to 29 percent.

“The big driver is Medicaid,” he said.

Another point of financial pressure was the need to scarf up $41 million more to fund the retirement programs.

And that, he explained, is why Tomblin called on a 7.5 percent rollback late last year in spending by state agencies, a drop that was met without furloughs and layoffs.

“We started the budget process with a $389 million gap,” he noted.

Looking into the succeeding year, that has been zeroed out and no further gaps are anticipated.

Deputy Revenue Secretary Mark Muchow said little or no revenue growth is projected in the coming year.

“There’s a greater chance of revenue decline than there is growth,” he said.

As coal production falls, and many states phase out coal-fired electricity generating plants, Muchow suggested things could get even bleaker for the industry.

Last December, there were 5,000 fewer jobs than in the previous year, but on the positive side, employment is up in manufacturing, the retail sector, construction, transportation and local government.

“We will have a negative employment growth of .3 percent in 2013 due to the mining sector,” Muchow said.

“We are an energy producing state. We live and die by energy.”

In fact, he noted, coal was the fastest growing part of West Virginia’s economy over the past decade.

Coal production is about 8 percent lower than last year’s pace, but on the positive side, exports are up some 17 percent compared to the previous year, he said.

About 8.5 percent of the coal-fired plants in the country will be shut down between now and 2016 and that will have an impact on the economy, he said.

“If you were to put up a bull’s-eye, the center of the bull’s-eye would be West Virginia,” Muchow said.

General revenue intake went into a nosedive in 2010, McKown noted, saying, “You can see what a recession does to collections.”

The base budget of $4.5 billion is padded with lottery money but that source shows signs of turning “flat” over the six-year plan.

“We’ve peaked out in the lottery,” McKown said, explaining that this source has fallen due to the general state of the economy and competition from adjoining states.

Text Only
Today's Front Page
  • Wyoming murder Murder in a rural county: Part 2 of 2

    Every night, before resting her head on a pillow, Billie Stewart calls on the Almighty for strength to endure another day.

    May 20, 2013 1 Photo

  • Scout Reserve 1 Public tours Scout Reserve

    Hundreds of West Virginians got the opportunity Sunday to preview the Summit Bechtel Family National Scout Reserve near Mount Hope in Fayette County.

    May 20, 2013 2 Photos

  • Thompson wants veterans nursing home in Beckley

    One day after his appointment to a cabinet-level post, Rick Thompson is striving to do what he can to assist federal officials land a veterans nursing home at the Beckley VA Medical Center.

    May 20, 2013

  • Wyoming student An eye toward the future

    Bobby Chambers has his future planned and he tries to stay one step ahead of the goals he has set for himself.

    May 20, 2013 1 Photo

  • Big decision looms for W.Va. House

    West Virginia’s House of Delegates faces a momentous decision after Speaker Rick Thompson departs for Gov. Earl Ray Tomblin’s Cabinet:  choosing a new leader will help set the stage for 2014, when Republicans aim to wipe out the Democrats’ ebbing majority.
     

    May 19, 2013

  • Vandalia gathering set for Memorial Day weekend

    The West Virginia Division of Culture and History invites the public to celebrate the traditional music of West Virginia on Memorial Day weekend, May 24-25 at the Cultural Center during the 37th annual Vandalia Gathering. The family-friendly event is free, and everyone is welcome.

    May 19, 2013

  • rideforred1 Red Riders

    May 19, 2013 2 Photos

  • aliff Murder in a rural county

    High on a hill, in woods overlooking a multi-family cemetery, a hunter set about readying a tree stand for the fall season when he spied a human skull.

    May 19, 2013 1 Photo

  • student An eye toward the future

    Woodrow Wilson High School senior Adelina M. Lancianese is well known in Raleigh County and West Virginia for her writing.

    May 19, 2013 1 Photo

  • Importance of cardiac unit at RGH, concern over temporary closure expressed

    Dorothy Wright-Reynolds will remember Nov. 13, 2009, for the rest of her life.

    May 18, 2013