The Senate Finance Committee reviewed several areas of potential shortcomings in the state’s fiscal status during a meeting Thursday at 9:30 a.m. with Deputy Revenue Secretary Mark Muchow presenting a report from the West Virginia Department of Revenue.
In his presentation, Muchow warned the committee of a possible recession next year, which would mostly come about as a result of West Virginia’s slow employment rate, which has a projected growth of 2.5 percent from 2015-2019, in comparison to the projected national average of 4.9 percent.
Muchow said many factors work to inhibit the state’s progress, including “sluggish” wage growth over the past four years, slow recovery from drops in coal and natural gas profits and exports, and a lack of significant income tax and sales tax revenue growth.
Muchow said the state should expect a $200 million budget gap this year, with a gap of $500 million in 2018.
West Virginia’s greatest challenge, Muchow said, is that job growth takes place in urban areas, but many of the state’s citizens live in rural communities that might not have as much access to potential job opportunities now that coal is a declining source of revenue.
The Senate Finance Committee will focus more on how these factors apply to Governor Justice’s proposed budget bill at their next meeting Thursday 3 p.m.
