CHARLESTON – The Legislature has been gradually breaking down large line items in what was the DHHR budget into the composite expenses that have historically made up those large lines. One of the purposes has been to restore the power of appropriation to the Legislature, a power that had been delegated to the Secretary of the Department of Health and Human Resources. Prior to this initiative, the $7 billion spent on DHHR spanned less than three pages in the budget.
We first divided DHHR into three agencies. This prevented the Department’s discretionary transferring of an appropriation made by the Legislature for the Department of Human Services to either the Department of Health or the Department of Facilities. Last session, we further divided each state-owned health facility into its own subsection of the budget.
This session, we broke down much, but not all, of Human Services into subsections and restricted the ability to transfer funds outside of those subsections. Ultimately, we increased the aggregate level of appropriation to Health, Human Services, and Health Facilities (what would have been DHHR) by about $9 million this year. However, this included a $100,000,000 improvement to contract nursing. This necessary improvement (which was needed to keep the state-owned hospitals open) required reductions in other areas.
While breaking the department up into three, the Legislature learned that appropriations we made to medical services in previous years had been redirected by the former Secretary to contract nursing in facilities by $64 million more than the Legislature’s largest appropriation improvement to contract nursing in prior years. In other words, it became clear where money was being redirected relative to the Department’s appropriation request. The previous Secretary was using a soft target request to fund mismanagement of contracts, which now exposed, is being corrected.
One of the subsections created in the budget this year was for waiver programs (federal non-mandatory programs in which the department elects to participate) that include Title XIX Aged and Disabled Waiver, Substance Use Disorder Waiver, Emotional Disturbance Waiver, Traumatic Brain Injury Waiver, and Intellectual Delay and Disability Waiver. We fully funded the line in Title XIX, but we reduced the other lines by 10%. Overall, we decreased that section by about 10%, with the exception of Title XIX (Aged and Disabled Waiver). The Department can now transfer between waivers, but can no longer transfer to or from other sections.
So, in short, there was a $100 million improvement to health facilities that resulted in a collective reduction of about $91 million to Human Services and Health Services.
The Legislature, in its final compromise, increased the base budget items by 4% in total, about $200 million, largely due to the House's insistence on pay raises in exchange for passing the bill to fix the unemployment reserve fund. Even at 4%, it’s more of an increase in spending than I would consider wise or responsible. But, it was more responsible than letting the unemployment reserve fund become more of a liability. Other large and looming liabilities include the $125 million and growing loss in BRIM, the employer (State's) share of PEIA, and the need to still lower our unemployment rates to employers, personal property tax rates, and personal income tax rates to competitive levels. This is absolutely required to increase our taxpayer base (working population) enough to afford market public employee pay, growing entitlement demand, let alone the elective entitlement demands.
Presently, 700,000 personal income taxpayers are paying for about 600,000 people’s medical and human services as well as covering the other aspects of government expenses. West Virginia is gradually decreasing that dependence on personal earnings with economic growth in corporate net income collections (approximately 14%) and slight growth in sales tax collections (approximately 5%). However, if legislators continue to demand an increase in base spending that equals or outpaces economic growth, we will never reach the point of properly affording government services.
Tarr (R-Putnam) is chairman of the West Virginia Senate Finance Committee.