W.Va. revenue officials brief lawmakers on ratings agency calls | News, Sports, Jobs

WHEELING — National ratings agencies had mostly praise for West Virginia’s financial footing according to state revenue officials.

Officials with the state Department of Revenue briefed members of the Joint Standing Committee on Finance on matters surrounding the current budget for fiscal year 2024 ending June 2024 during Monday’s legislative interim meetings in Wheeling.

Department of Revenue Cabinet Secretary Dave Hardy, who participated in Monday’s meeting by phone from Charleston, told lawmakers that state officials participated in phone calls last week with Moody’s, Standard and Poor’s, and Fitch. The phone calls help these bond ratings agencies when determining future ratings.

According to Hardy, all three ratings agencies praised West Virginia for maintaining a strong Rainy Day Fund, also called the revenue shortfall fund, which has more than $1.1 billion as of the end of October.

“We always get good feedback about our Rainy Day Fund balance,” Hardy said. “This year, of course, it was nearly $1.2 billion, and that’s always viewed very favorably by the rating agencies, and that’s nothing new.”

The state’s Public Employee Retirement System is nearly fully funded at 98.8%, while the Teacher’s Retirement System is 78.4% funded, up from 67.1% when Justice first took office in 2017. While there is some debate, the U.S. Government Accountability Office considers a state and local pension plan healthy if it is close to 80% funded.

We have improved by 11.3% in the last seven years, and we continue to climb out of that hole, and that’s quite an accomplishment,” Hardy said.

The state was also able to turn around over a decade its other post-employment benefits (OPEB) liability. The state had an OPEB liability of $3 billion in 2018, dropping to $1.6 billion in 2019. Hardy said as of this year, the state’s OPEB liability has been erased and is in the positive by $158 million.

“That was such a good outcome that we actually went back and audited those numbers,” Hardy said. “We get those numbers from PEIA and the retirement board, and that obviously was very well received by the rating agencies.”

Hardy also said the old worker’s compensation debt remaining from when the state privatized its worker’s compensation program (Now Encova Insurance), which was more than $2.2 billion in 2006, has now been retired. The fund now has a balance of $7 million.