For many years, legislators and governors in West Virginia have approved budgets based on conservative revenue estimates. That has served West Virginia's residents well; most fiscal years end with hefty budget surpluses available to pay down debt, build up the "rainy day" funds or provide modest cushions for future budgets.
Lawmakers and Gov. Earl Ray Tomblin attempted to do that for the fiscal year that began July 1-but there is reason to believe that despite their best efforts, they may have been off-track.
During July, state revenue was about $2.5 million short of what had been expected. It was worse last month, with income $14 million short of projections.
If revenue shortfalls continue to build, the $4 billion-plus general fund budget will tilt out of balance before the calendar year, not to mention the fiscal year, ends.
Tomblin already has told most agency heads to submit spending proposals for the next fiscal year that are 7.5 percent less than for the current budget. And he and legislators know maintaining the existing Medicaid program will cost $100 more for the 2013-14 year.
At the same time, the federal government wants West Virginia to dramatically expand its Medicaid program.
Clearly, it will be difficult to balance next year's budget-and perhaps to keep this one out of the red-without adding massive new spending cuts or increasing taxes.
That should be kept in mind as state leaders ponder what to do about the federal Medicaid expansion mandate.