Solve West Virginia’s Budget Crisis!

Your assignment is to close a budget gap of $500 million for fiscal year 2018. The choices offered below are based on specific proposals by government officials, state agencies, and independent experts

Each box = $1 millionAmount Resolved: $0.00 Million | Amount Remaining: $500.00 Million
You did it! You've made the tough choices and closed the budget gap.

HIGHER EDUCATION PROGRAMS

Eliminate state funding for three community and technical colleges,

including WVU Parkersburg, Bridgevalley, and Pierpont Community Colleges. Approximately 378 FTE employees are supported with these funds.

$25 million
Eliminate state funding for:

Concord University, Bluefield State College, Fairmont State University, West Liberty University, WV School of Osteopathic Medicine, Glenville State, and Fairmont State University. Approximately 709 FTE employees are supported with these funds.

$51 million
Eliminate the Higher Education Adult Part-Time Student Grant Program

(HEAPS) that provides financial aid to part-time students enrolling in post-secondary education and those seeking a postsecondary certificate, credential or skill development program in a high-demand occupation. Approximately 4,400 lose state grant.

(Source: WV HEPC)
$5 million
Eliminate the Higher Education Grant Program (HEGP)

that provides on average $2,100 per student in need-based financial aid to degree-seeking residents of West Virginia. Approximately 19,000 students lose grants.

(Source: WV HEPC)
$41 million
Eliminate the PROMISE Scholarship

that provides a merit-based annual award of up to $4,750 to recent West Virginia high school graduates that attend in-state public colleges and universities. Approximately 10,000 students lose scholarships.

(Source: WV HEPC)
$48 million

HEALTH & HUMAN SERVICES

Eliminate state aid for local health services

that provides funding for local public health departments to provide services such as vaccinations and health inspections. State revenue accounts for 37% of local Boards of Health funding.

$13 million
Eliminate state funding for Health Right Free Clinics

which provide medical, dental, pharmaceutical, and health education services to the uninsured, underinsured, and medically underserved low-income adults.

$3 million

Education Programs

4% cut to K-12 public education,

which would requiring laying off 805 teachers and 495 service workers.

$44 million
6.8% cut to K-12 public education,

which would requiring laying off 1,369 teachers and 841 service workers.

$75 million
9.0% cut to K-12 public education,

which would requiring laying off 1,825 teachers and 1,121 service workers

$100 million
Eliminate state funding for the Schools for the Deaf and the Blind.

181 FTE employees are supported with these funds.

$14 million
Eliminate the Department of Education and the Arts,

which includes funding for the Division of Culture and History’ the Library Commission, the Educational Broadcasting Authority, and the Division of Rehabilitation Services. 435 FTE employees are supported with these funds.

$31 million

Other Budget Cuts

Eliminate state funding for Fairs and Festivals

$5 million

$5 million
Eliminate the Bureau of Senior Services.

Approximately 37 FTE employees are supported with these funds.

$63 million
Eliminate the Department of Commerce,

which includes funding for the Divisions of Tourism, Forestry, Labor, Natural Resources, Miners Health Safety and Training, and Energy, the Geological and Economic Survey, the West Virginia Development Office, and Workforce West Virginia. Approximately 980 FTE employees are supported with these funds.

$52 million
Eliminate the Department of Veterans Affairs.

Approximately 200 FTE employees are supported by these funds.

$10 million

SALES TAX REVENUE OPTIONS

Apply to sales tax (6%) to telecommunications services,

including cell phone, telephone, and some ancillary services.

$60 million
Expand sales tax to include more personal services and digital downloads.

West Virginia’s sales tax currently excludes some downloadable digital goods (e.g. books, movies, and other digital products) and some personal services (e.g. barbershops, beauty and nails salons, massage and tattoo parlors, and private fitness centers).

(Source: WV Tax Department)
$16 million
Or raise the sales and use tax to 6.5 percent from 6 percent.

$98 million

(Source: WV Tax Department)
$98 million
Raise the sales and use tax to 7 percent from 6 percent.

West Virginia’s sales tax is relatively low in comparison to its neighbors. Legislators could look at raising the state’s sales tax from 6 percent to 6.5 or 7 percent.

(Source: WV Tax Department)
$196 million
Reinstate the grocery tax on food.

The sales tax on food for home consumption was phased out between 2005 and 2013.

(Source: WV Tax Department)
$167 million

SIN & SEVERANCE TAX REVENUE OPTIONS

Add a new, 1-cent per ounce tax on soda and other sugar-sweetened beverages.

West Virginia currently taxes bottled soft drinks 1 cent per 16.9 ounces.

(Source: Rudd Center UCONN)
$88 million
Increase cigarette tax to $1.55 per pack from $1.20 per pack and the wholesale tax on other tobacco products (cigars, chewing tobacco from 12 percent to 50 percent.

West Virginia taxes tobacco products at a lower rate than most states. Raising the tobacco tax would help the state address its unhealthy workforce while generating much-needed revenue.

(Source: WV Tax Department)
$60 million
Modify the state excess acreage tax by adding an annual $5 per acre tax on corporate landowners who own more than 10,000 acres.

$15 million

(Source: WVCBP estimates of WV Tax Department data)
$15 million
Raise taxes on alcohol sales.

Increase the beer barrel tax from to $11.00 per barrel from $5.50 per barrel, increase the per liter wine excise tax to 26.4 cents from 13.2 cents, and raise the wholesale mark-up on liquor products to generate $6.5 million.

(Source: WV Tax Department)
$15 million
Raise the natural gas severance tax to 6 percent

from its current rate of 5 percent.

(Source: WVCBP estimates of WV Tax Department data)
$19 million

INCOME & BUSINESS TAX REVENUE OPTIONS

Raise personal income taxes by 3% on households making more than $200,000 a year.

The effective income tax rate on households between $200,000 and $300,000 is 5.8% and 6.3% above $300,000.

(Source: ITEP)
$96 million
Reinstate the 2006 corporate net income tax rate to 9 percent.

Between 2007 and 2015, the rate was lowered from 9 percent to 6.5 percent.

(Source: WV Tax Department)
$69 million
Reinstate the business franchise tax to 0.70 percent.

Between 2007 and 2015 the business franchise tax rate phased out from 0.70 percent to 0 percent.

(Source: WV Tax Department data)
$150 million
Reinstate the Estate Tax:

First enacted in 1904, West Virginia’s estate tax effectively ended in 2005 when the state did not decouple from the federal estate tax changes.

(Source: WVCBP estimates of WV Tax Department data)
$15 million
Scale back personal income tax exemptions for high-income households:

West Virginians are provided a $2,000 personal exemption from their state income tax for each household member whether their income is $15,000 or $15 million.

(Source: ITEP)
$10 million