West Virginia

State Budget Practice Report Cards and Budget Resource Guide

West Virginia averaged a B in budget maneuvers for fiscal 2016 through 2018. Such actions include using one-time revenue measures to pay for recurring expenditures. The state collected annual B marks in 2016 and 2018 but a C in 2017.

The 2017 grade resulted from the state’s refinancing of $28 million in bonds. West Virginia received a premium over the face value of the bonds in the transaction, a fairly common feature of such sales nationwide. But rather than spread the upfront premium over the life of the bond, which matures in 2026, the state used the cash for near-term operating expenses.

West Virginia also scored a B average in budget forecasting. Its major weakness was a failure to use consensus revenue forecasts, a best practice ensuring that all parties involved in developing the budget agree to the same revenue figure. Instead, the governor’s office develops the revenue forecast with minimal legislative input.

The state’s poorest showing was in legacy costs, where it averaged a C. This was largely attributable to its failure to make the annual actuarially determined contribution for public workers’ other postemployment benefits (OPEB), principally health care. As of June 30, 2017, West Virginia had an unfunded OPEB liability of $2.5 billion, slightly more than its general fund collections in 2018.

Because West Virginia has established policies for disbursement and replenishment of its reserve funds, it earned a B average in that category. It missed making an A by failing to tie reserves to revenue volatility.

Download Printable State Report Card

To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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