Sen. Jim Justice, who promised rocket rides and boasted of enormous budget surpluses, is presenting up-to-date Gov. Patrick Morrisey with a problem: a projected $400 million deficit starting next year.
Morrisey, who is in his first week in office, said the deficit was what his administration had identified this week.
“We talk about what we inherited. It does not take into account new spending priorities or proposed additional tax cuts,” he said Thursday at the state Capitol in Charleston, West Virginia.
“These problems did not arise overnight,” he continued. “… I can tell you that we believe there are significant structural problems with the budget and I am committed to addressing them.”
The Republican, who has campaigned on ending high government spending, said the projected deficit does not mean his administration will be unable to do so Offer residents another tax cut or salary increases for teachers. He said they were still a possibility his administration would address rising healthcare costs effects on the Public Employees Insurance Agency.
“I’ve been very clear that I want West Virginia to be even more competitive with every state we touch,” Morrisey said. “But we have to look at this and it’s going to take a while for anyone to get through this… I know I remain very optimistic despite the large expenditures that have been made.”
Morrisey declined to place blame specifically on Justice, saying, “I’m not going to talk about individuals.” Justice, a Republican, was sworn into the US Senate on Tuesday, forgoing the first 10 days of his term in the Senate.
Justice faced a budget deficit of $500 million when he took office as governor in 2017.
He repeatedly commented on his work to improve the state’s financial situation, and did so regularly touted his millions in surpluses. The judiciary insisted that the legislature adhere to a uniform budget. Meanwhile, state health leaders said they needed nearly $300 million to address pressing issues in West Virginia, such as the substance abuse crisis. Education leaders said they needed $258 million to implement it necessary safety measures at school amid a nationwide spike in school violence.
Last month, Justice told the Parkersburg News and Sentinel“As far as I know, we don’t have a hole for it [fiscal year] 2026 at all…the next budget will certainly depend on decisions made by the next people coming in and the Legislature and so on and so on and so on.”
This year Budget billpassed by the House of Representatives and the Senate on the last evening In the 2024 regular legislative session, the general revenue budget for the current fiscal year was set at about $4.9 billion, 5% less than the $5.3 billion version introduced by Justice.
Morrisey said On Tuesday, he said there had been “a lot of spending” under the judiciary in recent months, adding that he would “analyze this rocket ride.” His government will consider a number of recent economic announcements under the judicial framework, and unfinished contracts could be scrapped as he seeks to save money.
“The era of big spending is over. It’s over. The time for spending beyond our means is over in West Virginia,” Morrisey said.
Measures are already being taken to reduce spending
Morrisey said he expects the state to meet budget goals this year by June 30, the end of the current fiscal year. The shortfall in this year’s budget will be temporarily replaced by a one-time cash balance from the provider tax, he said.
He stressed that he has already begun cost-cutting efforts, including an executive order issued Tuesday all government funding tied to diversity initiatives has been eliminated. Another executive order requires state agencies to develop a plan for more competent spending.
To save money, Morrisey said he would work with the Legislature Consolidating the existing Ministry of Economic Development with the Ministry of Commerce and consolidating the existing Ministry of Arts, Culture and History with the Ministry of Tourism. The considerations are “a first step towards making the state government more efficient and effective,” said Morrisey.
He was unable to provide any details about possible job cuts to save money.
Despite the budget shortfall, Morrisey will push forward his tax cut in collaboration with the Legislature.
“I believe West Virginia needs to continue to rely on tax cuts to become the lowest in the region,” he said.
Morrisey will present his budget proposal to lawmakers when the regular 60-day legislative session begins next month.
“We will continue to try to get the most efficiency out of state government because our taxpayers deserve nothing less,” he said.
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