West Virginia Fails to Meet Payroll as Taxes Fall Short

West Virginia, its treasury short of money, failed to mail paychecks on schedule this week to its 44,000 employees, but officials promised Tuesday that the workers will be paid today--if it can collect $7.8 million in taxes.

Don Adams, chief clerk of the state auditor’s office, said the state must collect $7.8 million today to meet the $15-million payroll.

“I’m not fretting,” Adams said. “Tuesday is our first big day for consumer sales taxes, and I think we’ll be all right.”

The state government closed its financial books Monday with just $8.6 million in the bank. Checks that should have been mailed Monday were held up.

Rumors began circulating through the Statehouse on Monday afternoon as word got out that tax collections for December continued to fall behind Gov. Arch Moore’s official revenue projections.

State tax collections for the first four months of the 1987-88 fiscal year are off by $23 million. The shortfall has caused the state to miss two state aid payments, worth $69 million, to West Virginia’s 55 county school districts.

Moore blamed West Virginia’s new tax legislation passed in 1985 that cut taxes on businesses. Moore said the new system will produce $160 million less this year than last.

To ease the revenue crunch, Moore called on lawmakers to let him borrow up to $100 million from the state’s investment fund. The Legislature agreed to let the governor borrow up to $50 million but tied the loan to an across-the-board, dollar-for-dollar cut in state spending.

Moore does not like the bill and has said he will veto it.

State Tax Commissioner Michael Caryl said he is confident the state will meet Wednesday’s payroll.

“I’m not alarmed,” Caryl said. “There shouldn’t be any hitch with insufficient funds.”

State Treasurer A. James Manchin said he has already written Wednesday’s paychecks and will hold them until he receives word from the auditor’s office that the money is there to cover them.

“We will work on a 24-hour alert,” Manchin said. “The checks are already printed, and there will be no delay.”