CHARLESTON - Revenue Secretary Bob Kiss is warning West Virginia state agencies to prepare for the possibility of budget cuts for the second time in two years.
In letters sent this week, Kiss told the agencies to prepare a base budget for the fiscal year that starts July 1, 2014, and a separate one reflecting a 7.5 percent cut.
"This is an exercise in case reductions are necessary," said Amy Shuler Goodwin, a spokeswoman for Gov. Earl Ray Tomblin, who called for similar cuts this budget year.
Kiss said revenue projections indicate a significant funding gap for the coming year, thanks to Medicaid costs, a slowdown in the coal industry, declining revenues from gambling and the national economy.
State Budget Director Mike McKown said the gap could add up to more than $300 million.
Media outlets say some programs will again be exempt from cuts, including: public defender service; public education; mine safety; Child Protective Services; Temporary Assistance to Needy Families, the Division of Corrections; the State Police retirement fund; the Veteran's Nursing Home in Clarksburg; and senior services.
Senate Finance Chair Senator Roman Prezioso, D-Marion, said he wasn't surprised by the letter.
"The way the revenues have been running lately, it's almost inevitable that we're going to have to cut some things again next year," he said. "The governor is just trying to prepare the agencies for a worst case scenario."
The cuts would free up another $75 million in the coming budget year, but it won't be enough.
Medicaid costs are widening the gap, and Kiss said the program currently needs almost $100 million more than what it's slated to receive next year. He says the costs are not related to the federal Affordable Care Act.
Last week, state budget officials said the state entered August with a nearly $18 million budget shortfall, largely due to lower personal income tax collections.