State ex rel. Department of Employment Security v. Manchin
In State ex rel. Department of Employment Security v. Manchin, 178 W.Va. 509, 361 S.E.2d 474 (1987), the Court upheld the sale of bonds pursuant to The Debt Fund Act (W.Va. Code 21A-8A-1 to -14 (1987) (Repl. Vol. 2002)) - legislation designed to repay the federal government for moneys borrowed to pay unemployment compensation premiums.
In syllabus point one of that decision, the Court recognized that "W.Va. Const., art. X, 4, allows the legislature to issue bonds without a constitutional amendment 'to redeem a previous liability of the State.'"
The Court found the "previous liability" exception applicable due to preexistent borrowing compelled by bleak economic conditions:
There is no question that the money borrowed from the federal government pursuant to our qualifying agreement with the Secretary of Labor...is a valid, existing debt of the State....
Thus, having determined that there is a preexisting liability of the State that in one way or another must be repaid to the federal government, we find no impediment in W.Va. Const., art. X, 4.
(178 W.Va. at 515, 361 S.E.3d at 480.)