West Virginia’s overall economic situation is much worse than anticipated, and WVU could see much deeper cuts than the $45 million already in the works.
A sharp drop in revenues from the energy sector (coal and natural gas) prompted Standard and Poor’s to downgrade the state’s bond rating from AA to AA- on April 22nd.
Gov. Earl Ray Tomblin’s Revenue Sec. Bob Kiss also reported that nonresident withholding tax revenue decreased due to a downturn on royalties on mineral interests owned by out-of-state residents, and a drop in payroll withholding for nonresident oil and gas workers is making an already bleak state budget situation look much worse.
Some are saying the shortfall is now close to half a billion dollars.
Phil Kabler of the Charleston Gazette-Mail writes, “Legislative leadership has had discussions with the Tomblin administration since then but have been unable to reach consensus on how to close funding shortfalls in the current and 2016-17 budget, particularly with some House Republicans opposed to any tax increases to balance the budget.
“Kiss said talks are continuing and the governor is willing to consider all reasonable proposals, including additional spending cuts and use of Rainy Day funds, but he said it will be impossible to close the deficits without new sources of revenue.”
West Virginia has seen a crisis like this before reports Chris Lawrence of WV MetroNews, “Historically, the 1989 legislature came together and passed a massive tax increase as their first act proposed by then newly elected Gov. Gaston Caperton. Some would say the state was in even worse shape in 1989 than today, but the positions are comparable.”
Two elected leaders here in Monongalia County are bracing for the worst as both sides dig in for a protracted battle over the state budget.
State Sen. Bob Beach (D – Monongalia, 13) [image courtesy of: Twitter.com]
State Sen. Bob Beach (D – Monongalia, 13) – April 22nd Facebook posting –
A whole lot of chest thumping and saber rattling going on within the the ranks of the WV House GOP (Liberty Caucus) regarding our current budget situation. After reading a recent letter which has been signed by all thirteen members we can’t help but scratch our heads. So again let’s add some clarity to the picture, while they (LC) claim to care for the people of WV they are demanding cuts be made rather then explore revenue enhancement. On the other side we the people (knowledgeable legislators) understand that 65% of our budget is protected by code or constitution, leaving a mere 35% of the budget to bear the brunt of their proposed $400 million cuts. To put this in perspective, the entire budget for Higher Education is $ 460 million annually. So I ask, which institution does the Liberty Caucus want to keep open? Does anyone really believe we can cut $400 million from our budget and not see massive layoffs?
Monongalia County Commissioner Tom Bloom (D) [image courtesy of: WBOY-TV12]
Tom Bloom (D) Monongalia County Commissioner – April 23rd Facebook postings –
SENATOR [sic] KISS ANNOUNCED THAT THE STATE IS CLOSER TO A SHORTFALL OF 1/2 BILLION DOLLARS BY THE END OF APRIL……….how is the budget going to be balanced?………..
This was before the bond ratings was dropped…..How is the legislature going to resolve this issue?…..MORE DRASTIC CUTS?….and this does not include the PEIA disaster……
WE NEED ANSWERS AND SOLUTIONS..NOW!!!!!!…Where are our leaders???? We drop prevailing wages,,,we add Right to Work…..but there are no companies beating down our doors to come to our state…We were misrepresented…….WE need to fix the budget NOW…….before it is too late…..
So, how will all of this impact WVU?
Corey McDonald of The Daily Athenaeum wrote in December 2015, “The University maintains it will continue to work toward creating an efficient financial plan to compensate for state budget cuts and ensure the best possible campus experience for students.” However, this was based on a $250 million shortfall, and not the updated projections of twice the original figure.
West Virginia University President Gordon Gee, in a special State of the University Address on March 1st, stated that WVU will trim $45 million from its budget. Again, this was before the state’s new figures were released.
I asked Sen. Beach, via Twitter, if students, faculty, and staff at WVU should be concerned?
Undergraduate students should be concerned about any portion of their financial aid packages which is funded by the state, including work-study.
Graduate students should be concerned whether their Graduate Assistant positions will be there when classes resume in August.
Adjunct instructors have to be wondering if the classes they teach will be offered at all or taught by a faculty member with higher seniority.
Staff will wait in anticipation to see if they receive the “essential personnel” label during a government shutdown, which determines who continues to work (getting paid) and who is furloughed (not getting paid) in the state workforce.
Undergraduate tuition at WVU for the 2015-16 academic year is $3,816 per semester for WV residents, and $10,716 for non-residents.
Graduate tuition is $4,284 per semester for WV residents, and $11,070 for non-residents in 2015-16. It would be safe to assume that these costs will go up for 2016-17.
A senior journalism student in the Reed College of Media told me her in-state tuition has gone up $3,500 per semester in the last 5 years, so increases have been happening for a while.
It would also be reasonable to expect that many student services and events will be reduced or eliminated.
The fact is that administrators at WVU cannot say anything with any amount of certainty, as to what the situation at WVU will be like in the fall, until they know how much state funding they will be receiving.
Other than Charleston – Kanawha County, Morgantown – Monongalia County’s economy is more dependent on the state than anywhere else in West Virginia because of WVU’s presence here.
How the state legislature and the governor deal with this budget crisis will have tremendous ramifications for WVU, Morgantown, Monongalia County, the North-Central region, and the entire Mountain State for years to come.
Lots of questions remain to be answered over the summer.
WVU: This is HUGE!