Finance News (Photo Illustration/Metro Creative)
CHARLESTON — West Virginia was given glowing marks in its annual report for fiscal health, available tax revenue surplus and rainy day fund. Truth in Accounting, a nonprofit organization that monitors and reviews states’ short- and long-term fiscal health, partnered with the University of California Daniels College of Business earlier this month to publish its annual state fiscal health review. A status report was released. Denver. The report, which examined fiscal year 2023 data, gave West Virginia a B grade for fiscal health, ranking it 18th out of 50 states. West Virginia was one of 19 states to earn a B grade, meaning the state finished the fiscal year with a tax surplus after paying its bills and obligations. West Virginia ended fiscal year 2023 with a general fund surplus of $1.8 billion at the end of June 2023, breaking all previous state records. According to an analysis by Truth in Accounting, West Virginia has more than $1.5 billion in surplus tax collections after expenses, which equates to approximately $2,600 per taxpayer. “West Virginia, like most other states, improved its fiscal position in 2023,” the report said. “This is a positive development, and Truth in Accounting praises the state’s efforts to improve fiscal solvency.”The report says West Virginia could use the money to pay its bills. The amount increased by $986 million. In fiscal year 2023, the state received $712 million from the U.S. Department of Transportation through amendments to the American Surface Transportation Act. Personal income tax revenue increased $474 million, consumer sales and use tax revenue increased $107 million, and miscellaneous business taxes, including corporate net income tax revenue, increased $82 million. West Virginia’s total assets in fiscal year 2023 were more than $35.8 billion. After deducting more than $15.3 billion in capital assets and more than $5.5 billion in restricted assets, West Virginia is left with more than $14.9 billion that can be used to pay bills of more than $13.4 billion, and the state has more than $1.5 billion in assets. This will leave a surplus. “Despite the $1.3 billion increase in first-year government spending, the state had sufficient funds to cover these expenses,” the report continued. The state’s total bill of more than $13.4 billion includes more than $6.2 billion in bonds, more than $6.8 billion in other liabilities, more than $2 billion in unfunded pension benefits, and more than $2 billion in debt related to capital assets. More than $1.5 billion less $125 million in unfunded retiree health benefits. Gov. Jim Justice recently boasted about the amount of tax money the state saves, claiming the state has more than $2 billion in reserves. The judge also acknowledged that a flat General Fund budget has been maintained over the past several years based on artificially low estimated revenues. “How have we been so successful? The main factor is that we’ve kept our budget flat,” Justice said. “As long as you keep the state budget relatively flat and don’t overspend or increase the budget to increase the budget, and as long as you don’t have a ton of pet projects and stuff like that…a lot of good things happen. What is a flat budget? Is it? It’s about taking care of the store.” According to the state Budget Office, West Virginia has more than $1.3 billion combined in two revenue deficit funds known as the Rainy Day Fund. West Virginia has about $460 million set aside in an income tax reserve fund to protect against a potential economic downturn caused by lower personal income tax rates. And the state just concluded a special legislative session that passed more than $500 million in additional spending and more than $826 million in surplus tax collections for the end of fiscal year 2024. The “Truth in Accounting” report praised the state’s ability to pay its bills and maintain a healthy amount of cash. But the report warned that future economic instability could cause the state to revert to these reserves. “While West Virginia ended fiscal year 2024 in strong financial health, market fluctuations in pension values, coupled with uncertainty around inflation and employment, have led to a decline in government services and benefits,” according to the report summary. It has become difficult to predict the future financial resources needed to maintain the Regarding West Virginia’s fiscal health. “Given these uncertainties, it is reassuring that the state has set aside funds to cover its financial obligations.” Steven Allen Adams can be reached at sadams@newsandsentinel.com.
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