West Virginia Lawmakers Hike Taxes, Cut School Funds To Eliminate Deficit

By Nancy Mathis — February 08, 1989 4 min read
  • Save to favorites
  • Print

Faced with a mounting financial crisis, West Virginia lawmakers last week adopted the largest tax increase in state history and ordered stiff budget cuts that extend to school aid.

The unexpectedly swift action came in a special session of the legislature called by Gov. Gaston Caperton as his first official act since being sworn in on Jan. 19. The Governor asked for, in addition to the tax hikes and budget cuts, a reorganization of state government and the enactment of ethics regulations for state officials.

Without drastic action, the state would have faced a $300-million deficit this year and approximately the same shortfall next year, said Steve Cohen, Mr. Caperton’s spokesman.

On Jan. 31, the House voted 77 to 22 and the Senate voted 25 to 7 to adopt $400 million in new revenue proposals outlined by Mr. Caperton.

The bulk of the new tax money will come from extending what had been a temporary 1-cent increase in the state sales tax and removing the sales-tax exemption on food.

Legislators also ordered a 3 percent reduction in funding for education and a 5 percent cut for other state agencies. Because the state is midway through its fiscal year, however, the reductions will actually mean that school districts must trim their budgets by 6 percent and that other agencies will face 10 percent cuts.

“Obviously, it will impair the abil some counties to continue to deliver quality education,” said John Pisapia, acting state superintendent. Mr. Pisapia said districts were preparing impact statements that the state board of education was to review this week.

He said many districts are laying off substitute teachers, postponing capital-improvement projects, eliminating travel reimbursements, and cancelling new education programs.

One district wanted to reduce its school year by eliminating teachers’ planning days, Mr. Pisapia said, but state law will not allow such a move.

The new state chief, appointed in December after the resignation of Thomas McNeill, said the budget cuts were particularly frustrating in light of the adjustments educators were forced to make last July, due to state-aid cuts in the 1989 budget.

Some educators have argued that a 1983 decision by the West Virginia Supreme Court declaring the school-finance system unconstitutional should shield districts from budget cuts. But Mr. Pisapia disagreed.

“The Governor has the right to cut the budget as long as he follows the [education] code and gives preferential treatment to education,” Mr. Pisapia said. “He has attempted to give education preferential treatment.”

Even with the tax increase and the budget cuts, said Mr. Cohen, there “are still a lot of problems.” The state’s economy is stagnant, its population is decreasing, and student enrollment is declining.

The Governor’s spokesman said Mr. Caperton had inherited a financial crisis from the previous administration. State government had, in effect, stopped paying its bills, he said, because it had no money.

According to a finance task force, state agencies had stopped paying vendors on time, sometimes lagging by 120 days or more. The state did not have enough money, the panel said, to repay $17 million owed businesses in 1988 tax refunds. It also ran behind on monthly state-aid payments to public schools.

The state also stopped making payments to a public-employee insurance agency’s account, producing an estimated $71 million in unpaid medical claims and forcing several hospitals to stop taking teachers or state employees as patients.

And it stopped allocating its share of funds to the now insolvent teacher-retirement system.

The West Virginia Education Association last week refiled a lawsuit in circuit court that would force the state to repay retirement-system funds. It was granted an injunction preventing the state from taking money from the retirement fund to pay for retirees’ insurance coverage.

A hearing will be set later on the union’s charges against the state. A similar suit had been filed with the state supreme court but the case was dismissed because the court ruledel15lthat the circuit court had jurisdiction.

Observers say that the tax increase and the $50 million in budget savings will mean that the state can pay its bills, but there will be little left over.

David Haney, assistant executive director of the West Virginia Education Association, said officials will not know how the remaining tax revenue will be spent until Mr. Caperton unveils his budget during the legislature’s regular session, which begins Feb. 8.

Mr. Haney noted, however, that both the financial task force and the Governor have stated that the sol4vency of the state insurance program and the teacher-retirement fund should be priorities.

The teachers’ union will lobby lawmakers to make those issues top priorities as well, Mr. Haney added.

He said teachers are hoping the proposed reorganization of state government might also result in financial savings that could then be used for a pay increase.

But Mr. Haney noted that until the state pays its bills, it cannot move forward. Officials are watching for Mr. Caperton’s next move, he said.

“We’re hoping he will put forth an exciting plan to move education along,” said Superintendent Pisapia.

A version of this article appeared in the February 08, 1989 edition of Education Week as West Virginia Lawmakers Hike Taxes, Cut School Funds To Eliminate Deficit


English-Language Learners Webinar Helping English-Learners Through Improved Parent Outreach: Strategies That Work
Communicating with families is key to helping students thrive – and that’s become even more apparent during a pandemic that’s upended student well-being and forced constant logistical changes in schools. Educators should pay particular attention
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Mathematics Webinar
Addressing Unfinished Learning in Math: Providing Tutoring at Scale
Most states as well as the federal government have landed on tutoring as a key strategy to address unfinished learning from the pandemic. Take math, for example. Studies have found that students lost more ground
Content provided by Yup Math Tutoring
Classroom Technology Webinar Building Better Blended Learning in K-12 Schools
The pandemic and the increasing use of technology in K-12 education it prompted has added renewed energy to the blended learning movement as most students are now learning in school buildings (and will likely continue

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Nearly a Million Kids Vaccinated in Week 1, White House Says
Experts say there are signs that it will be difficult to sustain the initial momentum.
4 min read
Leo Hahn, 11, gets the first shot of the Pfizer COVID-19 vaccine, Tuesday, Nov. 9, 2021, at the University of Washington Medical Center in Seattle. Last week, U.S. health officials gave the final signoff to Pfizer's kid-size COVID-19 shot, a milestone that opened a major expansion of the nation's vaccination campaign to children as young as 5. (AP Photo/Ted S. Warren)
Education How Schools Are Getting Kids the COVID Shot, and Why Some Aren’t
Some district leaders say offering vaccine clinics, with the involvement of trusted school staff, is key to helping overcome hesitancy.
5 min read
A girl walks outside of a mobile vaccine unit after getting the first dose of her COVID-19 vaccine, outside P.S. 277, Friday, Nov. 5, 2021, in the Bronx borough of New York. (AP Photo/Eduardo Munoz Alvarez)
Education Biden Administration Urges Schools to Provide COVID-19 Shots, Information for Kids
The Biden administration is encouraging local school districts to host vaccine clinics for kids and information on benefits of the shots.
2 min read
President Joe Biden, and first lady Jill Biden walk to board Marine One on the South Lawn of the White House in Washington, Saturday, Nov. 6, 2021. Biden is spending the weekend at his home in Rehoboth Beach, Del. (AP Photo/Alex Brandon)
Education Civil Rights Groups Sue Tennessee Over Law Against Transgender Student Athletes
The state law bars transgender athletes from playing public high school or middle school sports aligned with their gender identity.
3 min read
Amy Allen, the mother of an 8th grade transgender son, speaks after a Human Rights Campaign round table discussion on anti-transgender laws in Nashville, Tenn. on May 21, 2021.
Amy Allen, the mother of an 8th grade transgender son, speaks after a Human Rights Campaign round table discussion on anti-transgender laws in Nashville, Tenn. on May 21, 2021.
Mark Humphrey/AP