Lawmakers heard a report Monday morning regarding fiscal year 2025 budget matters from Peter Shirley, deputy secretary for the state Department of Revenue, during the second day of June interim meetings at Stonewall Resort State Park in Lewis County.
As of the end of May, fiscal year-to-date tax collections for the general revenue budget of $4.9 billion were 5 percent more than the $4.7 billion revenue estimate, leaving West Virginia with $236.9 million in surplus tax collections before fiscal year 2025 ends on June 30. Much of that surplus has already been appropriated.
Shirley said the state anticipates some significant budget pressures in the coming years, including increased costs associated with the Public Employees Insurance Agency (PEIA) and monetary support for the Hope Scholarship program, which aids students seeking education outside the public school system.
Shirley told lawmakers that state financial officials anticipate a $49 million cost increase for PEIA for fiscal year 2027 and a $56 million increase for fiscal year 2028.
“PEIA is obviously something that there’s a lot of discussions regarding a lot of work being done to try and think about the long term future of how we how we stabilize PEIA,” Shirley said.
The cost of the Hope Scholarship is expected to eventually balloon to as much as $300 million annually. The cost of the program in the proposed fiscal year 2026 budget is $110 million, up from $45 million in the current fiscal year. Shirley said the cost is likely to go up up by an additional $190 million in fiscal year 2027.
The scholarship amount for each student is expected to be $5,267.38 for the 2025-2026 school year. Shirley said the cost to the state is a mathematical problem of how many students opt in to the program for the coming year.
“Hopefully, we’ll be able to refine those numbers in the not-too-distant future now that we’ll soon know what the actual enrollment, at least to receive a full-year scholarship, will be going forward,” Shirley said.
Changes at the federal level also are likely to affect state finances, according to Shirley. Those include proposed changes to the federal tax code as well as changes to provider taxes and changes to Medicaid and the Supplemental Nutrition Assistance Program.
