WV state officials expect a $353 million deficit for the current budget year as revenues from unearthing coal, oil and natural gas continue to fall. |
Gov. Earl Ray Tomblin's proposal to raise the cigarette tax has met wide opposition in the Republican-led legislature. WV has near the lowest cigarette tax in the USA.
A report released by two conservative government watchdog organizations claims $330 million in wasteful spending by state agencies, calling for the closure of colleges like Glenville State College and Bluefield State College.
The report was produced by the Koch brothers-backed Taxpayers Protection Alliance and state partner, the Cardinal Institute for West Virginia Policy.
Further negative news related to Glenville State,
Moody's Investors Service has downgraded the rating on Glenville State College's 2011A lease-backed bonds to B1 with a negative outlook.
Moody's says the downgrade results from a substantial deterioration in operating performance and liquidity, with very limited remaining cash on hand.
"The downgrade also reflects expectations of ongoing financial pressure resulting from softening student demand, diminishing state funding, and a relatively inflexible expense base," says the report.
Glenville State College has been a key institution for higher education in Central West Virginia since 1872, and has been a vital influence on the economy of Gilmer County.
The "Wild and Wasteful West Virginia" paper produced by the conservative groups is essentially a compilation of previously published reports by the state Legislative Auditor's Office, as well as a number of news items on government spending.
The report recommends closing or consolidating colleges, saying Glenville State and Bluefield State the "least economically viable colleges."
It also cites money-losing athletic programs at Marshall and West Liberty, saying that with the latter program losing $1.5 million a year, "It would be best if West Liberty threw in the towel on its intercollegiate athletic endeavors."
From big budget items such as Medicaid and highways, to the Legislature's annual awarding of hundreds of small grants to support fairs and festivals statewide, the 54-page report calls itself, "A guide for state lawmakers."
"This is the reason why there shouldn't be tax increases in West Virginia," said David Williams, president of the Alexandria, Va.-based alliance. "There's plenty of wasteful spending to be cut in West Virginia."
Among the targets for the spending ax is West Virginia Public Broadcasting, public broadcasting a frequent target of the groups.
Scott Finn of West Virginia Public Broadcasting said, "Among other errors, the report references $750,000 of state spending to buy new equipment for WVPB stations, which in fact was funded through a federal grant."
WVPB has spent considerable money on the installation of fiber optic services to broadcast the WV Legislature live, he said.
It also calls for eliminating the state's eight Regional Educational Service Agencies (RESAs) and cutting Department of Education central office expenses by 10 percent.
Garrett Ballengee, executive director of the Cardinal Institute, confirmed that the report is primarily a compilation of news accounts and state audits, and is not an exhaustive study, but should be a starting point for discussions on government spending.
The largest item of waste cited in the report is $100 million of Medicaid spending, based on the settlement of a lawsuit last fall in which the Department of Health and Human Resources agreed to competitively bid contracts with health maintenance organizations.
The $100 million figure was from a quote by one of the plaintiffs.
The study cites a recent audit of the Division of Highways, which identified possible $25 million to $50 million of annual savings, out of a division budget that exceeds $1 billion a year.
The report also proposes eliminating the West Virginia Film Office, which awards tax credits to film and television productions that use state locations.
The report calls it a sleazy form of corporate welfare "used to bribe movie and television producers to film in the state."
In addition to calling for elimination of state grants for fairs and festivals ($2.9 million), it calls for eliminating most state funding for the arts, state museums, as well as ending publication of Goldenseal magazine.
It also objects to spending $1.8 million for sponsorship rights to The Greenbrier Classic PGA golf tournament, an expense it incorrectly attributes to the Legislature.
The report contends the money, actually from the state Development Office, "ultimately went to Jim Justice, the owner of the Greenbrier Resort, as well as a frequent donor to West Virginia elected officials and a 2016 gubernatorial candidate."
The purported wasteful spending in perspective, $330 million is less than 8 percent of the state's $4.3 billion general revenue budget, and about 2.5 percent of the state's total annual operating budget of $12.56 billion, which includes Lottery, special revenue and federal funds.