Gov. Patrick Morrisey updates the press on the state budget shortfalls during a briefing on Tuesday, Jan. 28, 2025, at the Capitol in Charleston, W.Va. (West Virginia Office of the Gov. Patrick Morrisey | Courtesy photo)
A federal court on Tuesday evening issued a stay regarding a freeze on federal grant and loan funding that was initially set to go into effect at 5 p.m. The freeze is now delayed until at least Feb. 3.
The freeze could have potentially large consequences for West Virginia, where in 2022 — the most recent year U.S. Census grants data is available — the state received more than 45% of its total revenue from federal grants, according to an analysis from Pew Charitable Trusts. Those grants support everything from health care, food assistance programs and educational services to infrastructure, housing and transportation. They fund numerous state-run programs and positions within state government.
In the order, U.S. District Judge Loren AliKhan told President Donald Trump’s administration not to block any federal awards or funds that were already scheduled to be distributed until Feb. 3. Her intent, she said, was to “maintain the status quo.” The stay will not affect any freezes for the funding of new programs or require the government to reimplement funding that previously ended.
The funding pause was initially announced on Monday evening in a two-page memo from the federal Office of Management and Budget. Two other memos followed on Tuesday to clarify what programs specifically would be impacted.
The intent of the freeze, according to the initial memo from the OMB, was to analyze all federal grant spending to ensure it is “dedicated to advancing [Trump] Administration priorities, focusing taxpayer dollars to advance a stronger and safer America, eliminating the financial burden of inflation for citizens, unleashing American energy and manufacturing, ending ‘wokeness’ and the weaponization of government, promoting efficiency in government, and Making America Healthy Again.”
The stay was reported around 5 p.m. Tuesday. Before that, however, there was little instruction available in West Virginia or elsewhere regarding how it would impact the government or individuals and organizations that rely on federal funding.
During a news conference Tuesday morning, West Virginia Gov. Patrick Morrisey said his office had already started receiving calls from constituents and agencies concerned about the effects of the freeze.
He said that no guidance had come from the federal government regarding the pause, but as information became available, he would share what they learned.
“I think what we’re going to do is we’re going to try to unpack that and talk with the Trump administration about that,” Morrisey said. “We’re gonna have the chance to have my team and I look through that, and then we’ll come back and answer those questions.”
Morrisey said he supported Trump’s order to administer the freeze.
“I think President Trump is going to be an amazing president and I’m excited to work with him across the board,” Morrisey said. “I do think what President Trump is trying to do generally is correct. The federal government — and quite frankly the [West Virginia] state government — has operated way beyond its means. … I’m going to work just like President Trump to tackle these issues and be transparent.”
Before the stay was announced, the suddenness of the funding freeze caused widespread panic and chaos in Washington, D.C. and beyond, according to States Newsroom’s D.C. Bureau.
In West Virginia, the federal analysis could impact up to $19.9 billion overall, Morrisey said, with “close to half of that” coming through “state-based sources.”
“We don’t have a projection on [the impacts of a freeze], but you’re right that close to 50% of the West Virginia aggregate spending budget is through federal and [Intra Governmental Transactions] transfers of some sort,” Morrisey said. “… So obviously we will look closely at that. There’s a lot of details associated with it.”
It’s unclear how long it could take for the federal government to analyze these funding sources.
This comes in West Virginia as the state is already staring down a potential $400 million budget deficit next year. Morrisey has spent his first two weeks in office looking at ways the state can cut spending next year to maintain a balanced budget.
The state budget for fiscal year 2025 should be proposed by Morrisey to the state Legislature in February, when the regular session is set to get underway.
The Legislature will be responsible for passing a budget by the end of the 60 day session in early April. That could be an even more complicated process than usual if questions remain regarding where federal funding cuts could be targeted in the state.
On Tuesday, Morrisey outlined multiple holes in the state’s current budget that will need to be filled for the continuance of government. Those were in Medicaid, the Public Employees Insurance Agency, the Department of Homeland Security and more.
He was clear that the budget holes currently present are the result of issues he “inherited” from former Gov. Jim Justice, who is now representing West Virginia in the U.S. Senate.
“These are not numbers that are in dispute. Third grade math would allow you to understand these numbers and agree with what the administration is doing,” Morrisey said. “It’s just not an area of dispute. I also want to be clear that every legislature, every governor, you’re set with a lot of tough decisions. I appreciate that and I respect that. So we’re in the going forward plan. I’m not looking backwards.”
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