Morrisey asks WV agencies to cut their budgets, don’t ask state to replace lost federal funds

by Amelia Ferrell Knisely, West Virginia Watch
January 12, 2026

West Virginia state agencies — in charge of schools, road repairs, foster care and more — along with the state Supreme Court have been asked by the Morrisey administration to cut their budgets by 2%.

Additionally, an August memo from the Department of Revenue told agencies, “Additional state funding should not be requested to replace lost federal funding.”

Spending cuts under President Donald Trump are likely to impact states like West Virginia that are constitutionally-bound to balance their budgets. 

As West Virginia agencies prepare budget requests for the next fiscal year, the state is going to lose hundreds of millions of federal dollars for important programs like Medicaid and the Supplemental Nutrition Assistance Program this year and in the coming years, making it one of the hardest hit states by federal funding cuts. 

West Virginia is the nation’s most federally-dependent state, meaning the state relies on federal dollars to operate critical programs. 

West Virginia “can’t just absorb all of the reductions or changes that may come from other places,” Gov. Patrick Morrisey told reporters Jan. 5. The governor has been focusing on weeding out “wasteful spending” in state government, issuing an executive order that asked agencies to review their spending to highlight inefficiencies. 

“We have to live within our means, and I’m working to make sure that there’s a continued period of strength where we’re managing our budget very, very carefully,” Morrisey said, adding that his administration would continue to invest in problems like too many foster children sent out of state.

The Morrissey administration did not provide an estimate of how much federal funding the state has lost in the last year.

Kelly Allen, executive director at the West Virginia Center on Budget and Policy, said there will be a significant impact on residents if the state doesn’t fill in the gaps left by lost federal dollars.

“I understand the pressure and probably the frustration that state lawmakers are under having all these federal costs shifted down onto the state budget,” Allen said. “If people don’t understand why services are suffering, then they’re going to blame the wrong people, like the people in that agency, rather than people actually understanding it’s all of these federal cuts.”

A December report from the center said, “West Virginia’s revenue and economic numbers signal concerns for the FY 2027 budget and the state’s ability to invest in programs proven to help families and workers thrive,” noting several years of lawmakers’ passing skinny budgets.

Along with the agency budget reductions, Morrisey called for cuts to the state’s personal income tax, and the Republican-led Legislature will have to approve his plan. Morrisey said the state could “deliver meaningful tax relief without sacrificing essential services” due to his administration’s work on agency budgets in the past year.

West Virginia will lose millions of federal dollars for Medicaid, SNAP

Federal budget slashes are expected to heavily impact the West Virginia Department of Human Services, which oversees the state’s SNAP and Medicaid programs along with other emergency aid programs and foster care. 

KFF estimated that West Virginia will lose up to $1 billion per year in health care funding due to changes to Medicaid and the Affordable Care Act once it’s fully phased in.

DoHS is likely to take on an additional $18 million a year in new SNAP administration costs as a result of Trump’s One Big Beautiful Bill Act, Allen noted.

“If the state does not step up and fill in that gap, we could see people who rely on SNAP having more trouble accessing customer service or getting help when they need it,” she said.

“The West Virginia Department of Human Services is currently in the process of outlining its FY 2027 budget; however, this process is deliberative, and any program changes will not be communicated until the release of the governor’s budget in January,” said DoHS spokesperson Angelica Hightower. Morrisey will deliver his budget proposal to lawmakers at the start of the legislative session this week in Charleston. 

“All departments are being asked to identify efficiencies in an effort to save taxpayer dollars and ensure we’re addressing the state’s long-term structural budget challenges,” Hightower continued. “The state is not in a position to absorb the significant amount of spending from the federal government, although it will look to make strategic investments where they can be beneficial to our citizens.”

Gailyn Markham, director of communications for the state Health Department, said the agency, which contains public health programs and the Office of Emergency Services, also said any program changes due to budgeting wouldn’t be communicated until Morrisey releases his budget proposal.

Markham emailed the same statement as Hightower.

Education department sees $12M loss in federal funding  

The West Virginia Department of Education saw a more than $12 million reduction in federal funding for the current fiscal year, receiving around $127 million for this year.

“As for [fiscal year 2027], we haven’t heard anything about when we can expect preliminary allocations from [United States Department of Education],” said Elizabeth Younis, manager of the state’s education department’s Office of Elementary and Secondary Education Act, Improvement and Support. 

“I do know that as our enrollment decreases our percentage of the funding will decrease,” she said.

State funding has also decreased for schools as the student population in West Virginia is tied to the state-level funding amount. More than 70 public schools have closed across West Virginia since 2019, and more school closures and consolidations have been proposed this year. 

The education department has submitted flat budget requests for at least the past five years, Younis said. 

“If funds aren’t sufficient, then the program would either look to find ways to operate more efficiently to provide the same level of services or would have to reduce services provided,” Younis said. “As costs have increased over that period, then these programs are shrinking as a result of the inflationary effects which does make it an issue.”

Younis said local education agencies have reserved some previous funding in expectation of the possibility of funding cuts to help continue services for students.  

“LEAs are having more conversations about next year and how to operate within decreased budgets,” she said.

Courts communicating funding needs to Legislature

West Virginia courts receive federal dollars to support some positions and programs but changes in Washington, D.C. aren’t expected to affect their funding.

The Supreme Court has experienced budget pressures, and the judicial branch last year received less funding than it requested from the Legislature while more judicial positions were added across the state. There have been rising public employee insurance costs, and the courts had reported a possible $7 million funding gap in its payroll.

“While we had some preliminary concerns with the initial guidance offered by the State Budget Office, mainly in context and considering the budget cut the judicial branch absorbed in the current fiscal year, we have been working collaboratively toward a fiscally responsible budget plan for fiscal year 2027,” said Jared Hunt, communications director for the Supreme Court of Appeals of West Virginia. 

“We continue to maintain an open and constructive dialogue about our funding needs,” he continued. “We are optimistic that we will be able to work with lawmakers throughout the budget process during the upcoming legislative session to secure the necessary funds that will enable us to efficiently and effectively administer the judicial branch of government.”

Morrisey will deliver his State of the State address on the evening of Jan. 14, which will provide a better look at the governor’s budget priorities. State agencies will have their individual budgets vetted by lawmakers during the legislative session. 

West Virginia Watch is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. West Virginia Watch maintains editorial independence. Contact Editor Leann Ray for questions: info@westvirginiawatch.com.