Gov. Justice vetoes $53M supplement, uses it to fund other projects

CHARLESTON — Medicaid dollars often are the magic ingredient for the state budget, and this year is no different.

When the Senate and House of Delegates considered their budget proposals, each put forth a $53 million supplemental appropriation for Medicaid.

House Finance Chairman Eric Householder, R-Berkeley, described that as a move to use the current year’s relatively healthy finances to pre-fund for next year, hedging against a flattening economy.

Because lawmakers work on a budget for the coming fiscal year, the “pre-funding” with this year’s dollars was to provide a cushion.

But this week, Gov. Jim Justice vetoed that supplemental appropriation, claiming “there are other matters in our state that can benefit” from the $53 million.

Revenue Secretary Dave Hardy expanded on that point during a Friday news conference to detail the passage of the budget.

He said Medicaid, which is a

$4 billion program in West Virginia funded largely by federal dollars, is running a surplus of $127 million.

“So the governor felt that we had adequate funds for now in the Medicaid fund,” Hardy said.

That conclusion provides state government with $53 million to spend on other stuff. Some of that money is already allocated.

Jim’s Dream, the governor’s idea to fight drug addiction and enhance workforce training, received a $12.7 million supplemental allocation on the final day of the legislative session.

The governor’s civil contingency fund, which he can use for emergency expenses, also received a $10 million allocation on the final day.

“It was basically a last-minute push from the Governor’s Office for the supplementals,” Householder said.

He said the Governor’s Office initially wanted $28 million for the civil contingency fund and $50 million for Jim’s Dream.

The appropriation bill for the civil contingency fund was introduced on Jan. 24 and then just sat for weeks. It finally kicked into gear on March 9, the final Saturday of the session, and passed both houses in a single day.

Lawmakers had to take votes to drop rules requiring bills to be read on three straight days.

The appropriation bill for the workforce training aspect of Jim’s Dream accomplished the same feat, speeding through the entire legislative process in one day and passing within the final half hour of the legislative session.

That spending leaves $30.3 million unallocated.

“It’s still there,” Hardy said. “Now $30 million of it is unappropriated for fiscal ’19.”

The Legislature, which is already in a special session for education “betterment,” still would need to allocate the $30.3 million.

Asked if recent concerns about secondary roads maintenance might prompt the governor to use the money that way, Hardy did not commit.

“The governor is very interested and very committed and very focused on the road issue,” Hardy said. “But I certainly don’t want to speak for whether there will be a bill just yet to spend the $30 million on roads.”

But last week the governor described dedicating a portion of current surplus to roads maintenance. “Clearly that’s a high emphasis with the governor,” Hardy acknowledged. “Probably his No. 1 priority.”

Householder had his own educated guess:

“I can almost read between the lines. I suspect that money will be used for a supplemental appropriation for roads, if I was a betting man.”

Delegate Mick Bates, the ranking Democrat on the House Finance Committee, has concerns about the practice of using Medicaid dollars as a flexible spending account for the state budget.

“You can’t tell me the healthcare demands of West Virginia can’t use some of that money,” he said.

If there is extra money to spend, Bates said, it might wind up as a priority of the special session on education. For example, lawmakers were considering an estimated $24 million toward school counselors, psychologists and nurses.

Some believe the allocation process deserves a more open approach. Much of what happened the last few days of the legislative session was the result of closed-door meetings among legislative finance leaders, Governor’s Office officials and staff.

“It was frustrating to me to get to the last couple of days thinking we would get down to looking at our priorities and then the House and Senate cut a deal,” Bates said.

“It’s just not the way I think you need to do things. But that’s the way it’s being conducted right now.”

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