ELKINS — West Virginia is looking at a $300-$400 million budget deficit in fiscal year 2018, and state lawmakers must be ready to answer difficult questions about how to bridge the gap, officials with the West Virginia Center on Budget and Policy said.

After a special legislative session that cost $595,000, Gov. Earl Ray Tomblin signed a budget for fiscal year 2017 that closed a $270 million gap through an increase in the tobacco tax, program cuts, money from agency accounts and $65 million from the state’s savings.

These were mostly one-time measures, said Ted Boettner, executive director of the Center on Budget and Policy, who was in Elkins on Thursday. The next budget will be just as challenging, if not more so, he said.

“I think we’ve swept all of the accounts we can,” he said. “We’re going to have to find $350 million just to break even.”

Gutting agency budgets and the state’s rainy day fund is not a viable long-term solution, said Seth DiStefano, campaign coordinator for the Center. It’s going to require a balanced approached that focuses increasing revenue.

“I think it’s fair to say that we’re not going to be able to continue to go back to the Rainy Day Fund without consequences,” he said.

To punctuate this point, DiStefano pointed to the recent downgrading of the state’s bond rating by both Standard and Poor’s and Fitch.

On top of a weak economy, an aging population, a struggling workforce, poor citizen health and a major drug problem, the state also has lost $425 million in tax revenue. This includes $17 million in general tax reductions, $27 million in income tax cuts, $69 million in corporate income tax reductions, $150 million from the phasing out of the franchise tax and $162 million from the repeal of the grocery tax.

“Revenue, as a share of the state’s economy, is well below what it has been,” Boettner said.

Severance taxes are declining, particularly in natural gas. West Virginia collected $170 million less in fiscal year 2016 compared to fiscal year 2015.

“People say it’s coal every time, but the drop has been in natural gas,” DiStefano said.

And major natural gas infrastructure projects like the Atlantic Coast Pipeline aren’t likely to improve matters, particularly when most of the natural gas extracted from the state is exported to other markets, Boettner said.

“It’s a lot of short-term employment, and because it’s not a long-term job creator, it’s not going to have a long-term impact,” he said.

General fund revenue spending is down across the board, with Medicaid ($196 million), social services ($52 million) and the Supreme Court ($15 million) as the only growing departments, according to the Center. Higher education funding has declined $131 million since 2008.

Cutting budgets can only go so far and can actually be counter-productive, Boettner said. He cited a recent layoff of more than 37 Division of Forestry workers, which only netted $2 million in savings.

Decreasing funding for higher education is another example. It can lead to increased tuition costs, which can cause “sticker shock” in prospective students who may decide college is too costly, he said.

“When you talk about cuts, it can mean job losses,” Boettner said. “We’re not going to get through this with cuts only. It’s going to take a combination of increasing revenue and solving some of our budget issues.”

In terms of generating revenue, Boettner said there are a number of options, from reinstating the grocery tax to generate $170 million, or legalizing marijuana to generate $45 million (or $194 million when factoring in the tourism component).

No matter how it’s done, West Virginians need to demand straight answers from lawmakers, Boettner said.

“We need to hold our policy makers accountable,” he said. “We need to ask them, ‘How are you going to raise even $100 million this year — not in two years or down the road but right now? What are you going to cut? If you’re going to raise taxes, what are you going to raise?'”