Well, the legislature appears to have acquiesced to the governor and has passed a budget that includes additional taxes and spending. That is disappointing. According to a Twitter post by Delegate Mike Folk (R - Berkeley), the new General Revenue budget contains $100 Million in new taxes and $98 Million in new spending. This increase will be reflected in the West Virginia general revenue budget, raising it from approximately $4.088 billion to around $4.188 billion.

The deal struck in the senate to accommodate outgoing governor Earle Ray Tomblin, a Democrat, raises taxes on tobacco products and its impact will fall disproportionately on small retail businesses in Jefferson County. If you own a gas station/convenience store in our area you can expect a decrease in business as this gives customers still another reason to patronize stores in neighboring Virginia. If you want to know how Jefferson County elected officials voted, for the record Delegate Espinosa voted for the tax increase, Delegates Upson and Skinner voted against it. On the Senate side, outgoing Senator Snyder voted for it, Senator Unger was absent and didn’t vote.

While the General Revenue budget garners the most attention, I suspect that most West Virginia taxpayers might be surprised to learn that it is only around one third of the total state budget. In fiscal 2016 it was 34.6% of the total state budget with Special Revenue Funds (13.7%) and Federal Funds accounts (38.9%) comprising over half of the state budget. According to the Executive Budget Report issued by Governor Tomblin, “The Federal Funds and the Special Revenue Funds are comprised of hundreds of individual, stand-alone, self-supporting, self-balancing accounts. Each account is part of a larger fund for financial reporting purposes only. Each account must have sufficient funds and an appropriation balance available to pay obligations of that specific account when due and may not expend any funds from the ‘bottom line’ of the total fund”. One state delegate I spoke with offered that there “may be” many as 900 of these accounts.

These Special Revenue accounts are not itemized in the state budget even though all of them represent revenue for the state and many of these accounts represent a potential tax increase. For example, as of July 1st, our state car inspection is going up by $2.00. Now I know that probably isn’t a big deal to most people, but in talking with one local repair shop what I heard was that it might affect the number of inspections the shop will do. Apparently, the shop usually buys 200 stickers for $200 but might think twice about having to fork over $600 for the same 200 stickers even though they can pass the cost on to you and me. Further, the shop owner was upset at having to pay the $2.00 difference for each sticker that they had already purchased and paid for but hadn’t issued yet.

I’m not making a value judgment regarding the increased price of an inspection sticker. The money goes to the state police to update equipment - particularly vehicles. I’m sure that the money will be put to good use. However, the state inspection program is one of the hundreds of special revenue accounts that represent potential tax increases. We taxpayers are always vulnerable to being nickeled and dimed to financial death by the state.

And while I’m on the subject of state inspections, I might add that after making several attempts, I’ve never been able to find anything in writing as to what a state inspection is supposed to include. It means different things to different inspection stations. I’ll give you a personal anecdote. I used to own a 1992 Volvo that I brought in for an annual inspection one year, long ago, only to have it fail because there was a crack in the lens for the right rear tail light, a crack I had never even noticed before. I took a piece of red tape, covered the crack in the lens and brought it to another shop. It passed, of course, and the shop owner never even noticed the red tape. It was the only time in my life that red tape actually worked in my favor.

I love that particular irony, but one more note about state mandated inspections. The state also mandates the price of the inspection. The inspection station can only charge $11.66 plus the cost of the sticker. So the price of an inspection will rise from the current $12.66 to $14.66. However the charge of $11.66 means that the state is requiring the shop to subsidize the process by mandating that the shop charge you a below market rate for the service. Just saying.

Getting back to the West Virginia state budget, there are anomalies in the reporting that I simply don’t understand. For example, if you peruse the archives at http://www.budget.wv.gov/executivebudget you will find that a change happened in the reporting of the state budget in fiscal year 2015 for which the state offers no explanation that I can find. If you know what it was, please email me at [email protected].

In 2014 the state executive budget report disclosed that the state budget was $23.9 Billion, up nearly 5 Billion since 2010 if you include all sources of revenue. Additionally, 25.4% of that amount, (more than $5 Billion) was dedicated to funding PEIA (the Public Employees Insurance program), Retirement (OPEB) and the Department of Administration. The following year, the overall state budget had mysteriously decreased to $12.3 Billion and the PEIA, Retirement and Department of Admin as a category, had vanished. Special Revenue funds mysteriously decreased from 58.3% of the budget to 12.2%. Federal Government funding equally mysteriously jumped from 17.6% of the budget in 2014 to 40.5% in 2015. Clearly a major change in the state’s accounting practices had occurred. However, there is no explanation in the governor’s introduction to the budget report in 2015 that explains these dramatic year over year changes.

While the general revenue fund portion of the budget continues to grow, as aforementioned that is only one third of the entire budget. There are other parts of the budget that contribute revenue that include the lottery, the state roads fund, the federal government and the special revenue accounts. Lottery funds fluctuate and are down since 2010 but have rebounded somewhat since 2013. State Roads funds have remained fairly constant. Federal dollars have increased by about half a billion over that time span - a scary number. Special revenue account funding remains a mystery.

As I’ve said before in this space, West Virginia doesn’t have a revenue problem, it has a spending problem. To that you can add that it has a transparency problem. The PEIA and OPEB, public employee insurance and pension program seems to have disappeared from the budget. I can’t find them in the executive summary, although the expenditures do show up on the Auditor’s website. Further, the Special Revenue accounts have never been transparently itemized in the state budget and their sudden dramatic decrease as reported in the West Virginia state budget leaves many unanswered questions.