West Virginia Higher Education Board of Governor’s Summit
August 1, 2014
State Budget Office
1
The West Virginia Fiscal Picture
Little or No Revenue Growth in FY 2014 or FY 2015
Coal Mining production in decline; Gas is picking up slack
Foreign Exports key
Baby Boomers becoming senior citizens
Teacher Retirement System: Only 19 More Years Funding with 10%+ of Total
General Revenue
Workers’ Compensation Solvent by CY2016?
2
National Fiscal Concerns
Federal funds make-up 1/3 of WV’s State Government Budget
Federal Health Care & Medicaid – effect on economy?
Future perpetual Federal budget deficits are still predicted
Medicare, Medicaid & Social Security make up almost 2/3 of Federal spending
Federal Government's accumulated debt continues to grow - $17.6 TRILLION
(debt per citizen > $55,000, debt per taxpayer > $151,000)
US GDP as of July 2014 = $17.3 Trillion
3
MCF
1,000,000,000
900,000,000
800,000,000
700,000,000
600,000,000
500,000,000
400,000,000
300,000,000
200,000,000
100,000,000
899,709,097
210,895,129
4
Tons
141,385,489
130,237,890
113,825,776
200908
200911
201002
201005
201008
201011
201102
201105
201108
201111
201202
201205
201208
201211
201302
201305
201308
201311
201402
201405
150,000,000
145,000,000
140,000,000
135,000,000
130,000,000
125,000,000
120,000,000
115,000,000
110,000,000
105,000,000
100,000,000
5
$ Millions
$4,000.0
$3,800.0
$3,600.0
$3,400.0
$3,200.0
$3,000.0
$2,800.0
$2,600.0
$2,400.0
$2,200.0
$2,000.0
$3,881.6
$3,605.2
Manufacturing Exports
6
Feb-14
$3,000.0
Sep-13
$4,000.0
Apr-13
Nov-12
Jun-12
Jan-12
Aug-11
Mar-11
Oct-10
May-10
Dec-09
Jul-09
Feb-09
Sep-08
Apr-08
Nov-07
Jun-07
Jan-07
$ Millions
$8,000.0
$7,497.8
$7,000.0
$6,000.0
$5,000.0
$4,027.4
$2,000.0
$1,000.0
$0.0
Non-Manufacturing Exports
7
State of West Virginia
FY 2014
Summary
General Revenue:
Estimated Collections
Actual Base Collections
Shortfall
One time revenues
Mid-year budget cut
Actual Surplus from FY14 activity
Lottery Funds:
Anticipated Surplus
$4,136,001,000
$4,036,104,603
-$99,896,397
$70,000,000
$33,000,004
$3,103,607
$30,000,000
Actual FY14 General Revenue collections only $2 million higher than FY13's
Added $171 million of base state funding for Medicaid
No layoffs or furloughs
Generally agencies took a 7.5% ATB budget cut
Good cash flow - paying bills on time
100% of retirement contributions made
Bond ratings still hold
No use of Rainy Day fund
8
State Of West Virginia
General & Lottery Revenues
(in millions $)
General
Personal Income Tax
Sales / Use Tax
Corporate Net Income
Severance Tax
All Others
total
% change
FY 10
Actual
1,447
1,096
233
400
582
3,758
FY 11
Actual
1,593
1,148
303
441
579
4,064
8.1%
FY 12
Actual
1,689
1,216
188
468
542
4,103
1.0%
FY 13
Actual
1,746
1,193
238
410
517
4,104
0.0%
275
199
40
17
531
258
199
36
32
525
-1.1%
274
265
46
38
623
18.7%
226
200
47
36
509
-18.3%
Lottery
Racetrack Video
Limited Video
Traditional Games
Table Games
total
% change
FY 14
FY 15
FY 16
FY 17
FY 18
FY 19
Actual Estimate Estimate Estimate Estimate Estimate
1,664
1,810
1,908
2,061
2,165
2,263
1,173
1,254
1,279
1,313
1,367
1,420
204
202
173
171
182
188
489
475
531
549
537
512
576
513
504
550
550
552
4,106
4,254
4,395
4,644
4,801
4,935
0.0%
3.6%
3.3%
5.7%
3.4%
2.8%
174
188
31
32
425
-16.5%
156
191
36
22
405
-4.7%
153
191
36
22
402
-0.7%
153
191
36
22
402
0.0%
153
191
36
22
402
0.0%
153
191
36
22
402
0.0%
Note that FY14 Lottery numbers are estimated
9
WV State Funding Per
Capita
$290
$280
$270
$260
$250
$240
$230
$220
30
WV Ranking Out of 50
$300
Rank (#1 = Highest)
25
20
15
10
5
-
10
$9.00
$8.50
$8.00
$7.50
$7.00
Rank (#1 = Highest)
WV Ranking Out of 50
WV State Funding Per
$1,000 of Personal
Income
18
16
14
12
10
8
6
4
2
-
11
State of West Virginia
General & Lottery Appropriations
Department
Public Education
FY 2009
% of
total
FY 2015
% of
total
$ 1,918,411,298
44.24%
$ 2,070,210,565
44.94%
Health & Human Resources
862,091,049
19.88%
1,038,529,728
22.55%
Higher Education
483,015,423
11.14%
475,060,375
10.31%
All Others
1,073,107,891
24.75%
1,022,589,390
22.20%
Total
$ 4,336,625,661
$ 4,606,390,058
12
State of West Virginia
FY 2015
Summary
General Revenue:
Estimated Collections
(3.6% higher than FY14)
$4,253,951,000
Lottery Funds:
Increased bond coverage
Revenues remain flat
Required $80 million of base state funding for Medicaid
Medicaid funding currently short $76 million
No layoffs or furloughs
Generally agencies took a 7.5% ATB budget cut (Higher Ed 3.75%)
Good cash flow predicted
100% of retirement contributions made
Bond ratings still hold
$100 million usage of Rainy Day fund
13
Rainy Day Balance at End of Fiscal Year
$1,200,000,000
$1,000,000,000
$800,000,000
$600,000,000
$400,000,000
$200,000,000
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2%
12%
22.8% est
20.1%
14
General & Lottery Funds
5.500
5.500
5.300
5.300
5.100
5.100
4.900
B
i
4.700
l
l
i 4.500
o
n 4.300
4.900
$
4.700
4.500
4.300
4.100
4.100
3.900
3.900
Base Revenues
Base Expenditures
3.700
3.700
3.500
3.500
2007
2008
2009
2010
2011
2012
2013
2014
Fiscal Year
(FY07-FY14 actual)
(FY15-FY19 estimated)
2015
2016
2017
2018
2019
15
Six Year Financial Plan
Through FY 2019
General & Lottery Revenues
(In Thousands $) (as of 8/1/2014)
Preliminary DRAFT - Subject to ChangeCurrent Baseline
Estimated Revenue
General & Lottery Revenue
One time revenues
Total Available
Actual
2013
Actual
2014
Enacted
2015
Projected
2016
Projected
2017
Projected
2018
Projected
2019
$4,484,434
171,619
$4,656,053
$4,337,009
307,288
$4,644,297
$4,621,245
2,300
$4,623,545
$4,666,079
$4,920,998
$5,083,858
$5,237,228
$4,666,079
$4,920,998
$5,083,858
$5,237,228
$4,520,291
$4,661,121
$4,814,860
$4,979,730
$5,143,438
$5,267,038
426,063
1,876,166
512,952
1,705,110
170,725
4,404
(30,522)
(3,777)
79,966
(14,641)
(7,370)
95,784
35,740
2,262
500
126,368
49,355
2,323
(3,000)
115,030
56,524
2,502
0
64,574
46,911
2,700
0
103,950
$4,520,291
$4,661,121
$4,814,860
$4,979,730
$5,143,438
$5,267,038
$5,420,599
135,516
(46,281)
(132,656)
6,349
4,560
4,820
4,629
$246
$29,457
($58,659)
($320,000)
($227,000)
($188,000)
($188,000)
Estimated Expenditures
Base Budget
Expenditure Growth:
Medicaid
Public Education
Higher Education
All Other
Total Ongoing Base Budget
One Time Expenditures & Adjustments
Estimated Balance (Gaps)
Note: This six-year financial plan is a tool for analyzing future budgets and any gaps must be balanced.
16