Projections: Too early to celebrate revenue growth

West Virginia Gov. Jim Justice offered the state a big pat on the back last week, during the announcement that it ended fiscal 2018 with a surplus of $36 million. The Mountain State has experienced revenue growth, and that is fantastic news.

But lawmakers were right to be leery of Justice’s assertions, six months ago, that an extra $58 million was “absolutely there” in the FY2019 budget, based on revenue projections. Though they would likely have been glad to be able to take Justice at his word back in February, as he touted his own plan to give most public employees a pay raise, state Senate Majority Leader Ryan Ferns, R-Ohio, was correct to point out “Revenues don’t increase based on negotiations with employees.”

Nor do they always rise to meet expectations. In fact, actual collections fell short of monthly revenue projections six times in FY2018. In January, collections missed the mark by more than $28 million.

A look back at the past fiscal year shows just how shaky revenue projections can be, and how unpredictable any single revenue stream can be.

Remember, in addition to funding to cover that pay raise, the Public Employee Insurance Agency is going to need approximately $50 million every year to keep up with the cost of healthcare. Representatives of the state’s two teachers’ unions have suggested there is a need for a dedicated funding source for PEIA.

During the revenue announcement last week, Justice appeared to nod toward the need to keep working on both improving revenue streams AND right-sizing government to best spend taxpayers dollars to serve those same taxpayers.

“It is a good day,” he said. “What we want to do is make enough more to help all.”

Surely Justice understands it is not time to truly celebrate — not yet. West Virginians have no way of knowing how they will be affected by national and international economic moves, or simply even blips in the natural gas industry, in the coming year.

Here’s hoping he and West Virginia lawmakers — also facing a historic and incredibly important decision that could affect the entire State Supreme Court of Appeals — can keep this growth going.

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