Potential $465M federal clawback raises concerns about West Virginia schools

CHARLESTON, W.Va. (AP) — West Virginia Republican Gov. Jim Justice’s administration has been characterized by flat budgets and record surpluses that helped cut the state’s income tax last year.

Now, the state could face collateral damage: a possible $465 million clawback of pandemic aid by the U.S. Department of Education.

It has thrown the state’s budget process into disarray and caused uncertainty in the days before the 60-day legislative session is scheduled to end Saturday, with lawmakers saying they’ll pass a “skinny budget” and reconvene to address unfinished business in May, when the financial situation is clearer.

It has also reignited old concerns about whether West Virginia, with one in four children living in poverty, is upholding its constitutional obligation to fund a “thorough and efficient system of free schools.”

Since Justice took office in 2017, he has boasted flat budget after flat budget, which he attributed to conservative management. But the governor, who is now running for U.S. Sen Joe Manchin’s seat, was accused at times of underfunding state agencies and intentionally low-balling revenue estimates to create false surpluses. Those surpluses were further bolstered by record severance tax collections, in part because of high energy prices from the war in Ukraine.

Kelly Allen, executive director of the West Virginia Center on Budget and Policy, was one who expressed skepticism about whether the state could afford a $754 million income tax cut, particularly when a dozen school districts lack social workers and psychologists.

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