Despite Tomblin's imposed cuts, state has almost $1.5 billion set aside
CHARLESTON, W.Va. -- Although the Tomblin administration is imposing $75 million in budget cuts to balance the 2013-14 state budget, state Auditor Glen Gainer said the state has nearly $1.5 billion set aside in various reserve funds, surplus funds, and re-appropriated accounts.
Most of that is in the state's two Rainy Day reserve funds, which as of Dec. 31 contained $912.86 million. Additionally, the state has $45 million sitting in a reserve fund used to pay income tax refunds.
"When you look at all that together, we're sitting at $957,885,677, which is a phenomenal position for the state to be in at this time," Gainer told the House Finance Committee.
Gainer said he supports legislation introduced by Gov. Earl Ray Tomblin to raise the cap on the "Rainy Day A" fund from 13 percent to 15 percent of the annual general revenue budget. Currently, that fund contains $566.9 million, or about 13.7 percent of the general revenue budget.
"I support raising that cap. The more we can put in reserve, the better," said Gainer.
Besides having the funds available in the event of a widespread natural or fiscal disaster, the Rainy Day fund assures high bond ratings, which translates into low interest rates when the state issues bonds for construction projects.
However, Gainer said the income tax refund reserve fund -- which currently contains $45 million -- is no longer needed.
Created by law in the early 1960s, then-Gov. Gaston Caperton transferred $17 million of state funds into the long-dormant account so that state personal income tax refunds could be paid on a timely basis. Cash crunches in the mid- to late-1980s meant that taxpayers frequently had to wait until late in the summer to get their refund checks from the state.
With no cash-flow issues, the refund reserve fund has sat at $45 million for the past seven years, and Gainer said those dollars could be better used either in general revenue or in the Rainy Day fund.
"I would rather see that fund go away," he said.
Additionally, the state has about $545.8 million in various surplus funds and unexpended appropriations, with $389 million of that in unspent balances that are automatically re-appropriated in each new state budget.
That includes more than $25 million in balances in the Legislature's Joint Expenditures and TRAFFIC contingency fund accounts.
Reach Phil Kabler at email@example.com or 304-348-1220.