- Associated Press - Wednesday, January 14, 2015

CHARLESTON, W.Va. (AP) - Gov. Earl Ray Tomblin plans to address state budget woes by tapping $69 million in reserves and making $72 million in targeted cuts to areas such as education and health and human services, members of his administration said Wednesday.

Revenue Secretary Bob Kiss and other budget officials outlined the Democratic governor’s plan to bridge an expected $195 million budget gap next year.

Tomblin’s proposal would dip into the state Rainy Day Fund for a second year in a row, and the second time ever to cover a budget hole. The 2016 fiscal year blueprint would use $68.6 million from reserves.

The current budget that Tomblin signed uses $100 million from the fund, which is still considered very well-stocked at $856 million.

In West Virginia, state revenues are stagnating amid falling energy prices, lower coal demand, weak wage growth and a federal payroll tax increase, as well as turmoil in the federal government and health sectors, Kiss has said.

The issue of state reserves, however, could test how far apart the governor and the newly minted Republican-majority Legislature will be. The GOP, which has secured its first legislative majorities in more than eight decades, doesn’t want to touch reserves.

Kiss said the administration is open to finding ways to limit tapping the Rainy Day Fund. Republicans also want any increase in revenue to be offset by equivalent cuts, so they are banking on finding sufficient cuts to balance a budget of about $4.7 billion in discretionary money. Even much of that is legally shielded from cuts.

Democratic Senate Minority Leader Jeff Kessler, D-Marshall, has also suggested raising the cigarette tax to bring in another $100 million, though Republicans are taking a hard line against raising taxes. He also wants to avoid using reserves.

Tomblin’s budget doesn’t include tax hikes. Nor does it contain the 7.5 percent cuts spread across many areas for two years in a row.

But the plan still would make $72 million in pinpointed cuts to areas such as public education, higher education and the Department of Health and Human Resources. The health cuts could target areas now covered by the expansion of Medicaid eligibility under the Affordable Care Act.

Kiss said further details would emerge Thursday during legislative budget presentations.

There won’t be raises, Tomblin budget officials said, except for customary teacher step increases and some court-ordered pay bumps, such as in corrections.

Ultimately, it’s up to the Republican-led Legislature to craft the state budget during the 60-day session that started Wednesday.

Tomblin can make line-item vetoes in the budget passed by lawmakers.

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