Thursday, January 16, 2014

West Virginia's Budget Situation May Not Be As Secure As We Thought

The Mercatus Center at George Mason University released a study this week that rated states' financial conditions.  West Virginia, which has done relatively well in the past decade, actually rates as one of the worst states in the nation in terms of solvency.

This study does not rate what has been done in the past, but speculates on both the near future and the next several years.  It asked:

Can a state easily access enough cash to pay its bills?

Can it consistently create enough revenue to pay its bills?

Can it cover long term obligations?

Can it continue to provide an adequate level of services?

According to Mercatus, West Virginia's financial position is fairly fragile.  Some of the reasons stem from the severe drop in coal production due to Obama Administration policies.  The state also shot itself in the foot by signing up for the expansion of Medicaid encouraged by the federal government.  Initially federal money would cover the costs, but eventually the state must assume the burden.

Revenues are dropping but the state has expanded its entitlement burden without considering the cost. Obama's bad policy and state Democrats' poor judgment threaten to undo the financial security West Virginia has enjoyed for the past several years.

Clearly the state needs leadership that is not tied so tightly to the Democratic Party.

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