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Highways could be priority for W.Va. remaining fiscal surplus

West Virginia’s state government finished the fiscal year with a $1.8 billion surplus and still has $451 million of that unappropriated.

A large portion of what remains to be appropriated is likely to support highways maintenance, and state officials are still figuring out the rest.

“I know there’s been discussion, and I certainly won’t speak for the Legislature or the governor, about whether some of those dollars might go into highways — because in the past we have allocated surplus dollars year in and year out to help catch up all the deferred maintenance on our highways,” Revenue Secretary Dave Hardy said this week.

“So we’re in a wonderful situation. It’s because there’s been fiscal strength in our budget.”

When the fiscal year ended June 30, West Virginia wound up $1.8 billion over estimate.

The fiscal 2024 budget passed earlier this year has already appropriated $1.165 billion of the surplus.

By law, a percentage of the year-end surplus must be transferred to the state’s Rainy Day Fund, and this year that amount is about $231 million.

All that leaves more than $400 million unappropriated, so lawmakers and the governor will determine priorities for those additional dollars.

“We can do a lot of great stuff. We’ve already done great stuff,” Justice said during a briefing.

The Justice administration and legislative leaders have acknowledged that revenue estimates are established with the intent of holding spending steady.

A range of revenue sources — severance taxes, corporate net income taxes, personal income taxes and consumer sales taxes — all wound up coming in ahead of the estimates, leading to the surplus.

The Legislature’s budgeting process had already anticipated the likelihood of a big surplus and so an additional $1,165,478,000 was approved for disbursement in case the state came out ahead.

The surplus dollars already appropriated will go to entities like a food bank fund maintained by the Governor’s Office, the Communities in Schools program, tourism promotion, deferred maintenance projects and more.

“The surplus section has been the way that we take the benefit of holding down our expenses, holding down our base budget, waiting until the fiscal year is over and then allocating dollars to unmet needs,” Hardy said.

“This is a very responsible way to do budgeting in that the baseline budget is held to a very base number and then at the end of the fiscal year — much like you might close down your own personal financial books at the end of the year — then we have the dollars to allocate toward these very large projects.”

Lawmakers could allocate millions of remaining dollars during a special session, possibly in August. The most likely immediate target for the remainder is highways. Lawmakers could choose additional priorities at that point, or they could wait even until the next regular legislative session to assess priorities.

“We’ll start having discussions, and we’ve already been in discussions for that matter. And we’ve got the numbers to work with,” Senate President Craig Blair, R-Berkeley, said today on MetroNews’ “Talkline.”
“It was the flatline budget that got us to this point.”

Other possibilities for surplus allocation, Blair said, include millions more to support the Public Employees Insurance Agency, more for deferred maintenance, economic development and a revolving loan fund.

“That is the big, heavy lift on there,” Blair said.

He added, “We’re looking at the road fund, too, of a $150 million transfer.”

Sen. Mike Oliverio, R-Monongalia, said his constituents seem most interested in funding and maintaining roads.

“The biggest thing I hear from my constituency is more money into local roads and maintaining,” Oliverio said on “Talk of the Town” on WAJR Radio.

“You don’t have a lot of people calling for more roads all the time. They just want to see the roads maintained, and I think we’ll have more dollars to do that.”

House Finance Chairman Vernon Criss, R-Wood, said there’s still plenty of time to determine what to do with the remaining surplus. But he agreed additional highways funding is a likely first priority.

“My take of it, right now I would like to see the Legislature approve a little over 100 million general revenue dollars to highways, so we can use these dollars for paving projects that can still take place during this construction season,” Criss said in a telephone interview.

“Also, I understand from the highways department they’re still in need of equipment, and there should be some dollars set aside for the purchasing of equipment. It’s like every other business in the state of West Virginia; they’re having a tough time finding employees, but also they’re having a tough time finding equipment.”

The rest, Criss said, can be decided in good time.

“I don’t see any rush to use the money right now unless there’s a critical need. I haven’t heard of any critical needs. So, as far as I’m concerned, we just need to take our time and look at the other situations that need some kind of infrastructure monies. We can discuss those over the fall and promote those in January when we come back into regular session.”