Budget deal clouds end of legislative session

From a larger perspective, they were passing time until Gov. Jim Justice vetoed the bill and called them in for a special session to consider the terms of a deal Justice reached with Senate majority leadership Saturday afternoon.

During a news conference that began at 10 p.m. Saturday, the last night of the regular legislative session, Justice said he and Senate President Mitch Carmichael had struck a deal to fill an estimated $500 million budget hole without cutting the state’s education system or the Department of Health and Human Resources, and instead rely on about $50 million in cuts elsewhere along with an increase to the sales tax and establishing a commercial activities tax.

“Wouldn’t it be nice for everybody to leave here at 12 o’clock tonight and know we didn’t hurt an autistic kid; we didn’t take away from a terrible situation our seniors are in; we didn’t really strip away or hurt our education process?” Justice said at the conference in his press room. “We found a pathway to really do some real goodness and put West Virginia on a trajectory that is like nobody’s business.”

The announcement seemed to catch House majority leadership off-guard, with House Speaker Tim Armstead, R-Kanawha, and House Finance Committee Chairman Eric Nelson, R-Kanawha, quickly leaving the House chamber after the conference ended.

Just after midnight Sunday, Carmichael said the governor had been negotiating with members of the House and the Senate, and the deal between Justice and the Senate took root Saturday.

“We’d been talking with the governor, as he had in the House previously,” Carmichael said. “They had their own scenarios. They couldn’t get to an agreement. We were embracing that concept, with the governor working with the House. Then it shifted where he was talking with several of our senators, and we felt like there was some room there to get an agreement, so we conceded on some things, and he conceded on some things.”

Those concessions, in “structure, theory and concept,” as Carmichael said, include a 1 percent sales tax increase, taking the rate to 7 percent. Neither Justice nor Carmichael said whether the sales tax would be expanded to other services.

Justice said the budget agreement also includes a commercial activities tax, which Justice has advocated for throughout the session.

The 0.00045 percent tax on businesses’ gross receipts has been estimated to bring in $45 million in revenue. Justice has described the tax as taking one penny for every $4 spent in the Mountain State.

The other part of Justice’s agreement with the Senate included his new roads plan, which was approved in a separate bill earlier Saturday.

The proposal also includes a multi-year process of decreasing the state’s income tax beginning on January 1, 2018, Justice said.

The agreement includes a 4.5-cent increase on the state’s gasoline tax.

Per Justice’s proposal, lawmakers agreed to hold a voter referendum this year on issuing $1.6 billion in bonds to rebuild state highways and bridges.

Justice proposed a major roads program using bonds to restore infrastructure and put thousands of West Virginians to work.

He proposed increasing the gasoline tax by 4.5 cents a gallon and raising some Department of Motor Vehicle fees and expressway tolls to support bonds issued over four years.

The state would also apply for matching federal highway funds.

The Senate passed legislation to raise the gas tax two weeks ago, which doesn’t require voter approval, but the House did not advance the measure. That measure will be up for consideration again in the agreement between Justice and the Senate.

While the details of the deal were rolling out and without an extension of the regular session or a call for a special session, lawmakers were obligated to pass a budget Saturday night, which they did through HB 2018.

Article 6, Section 51 of the West Virginia Constitution requires the governor to present to legislators a budget bill, outlining how much money the state is expected to earn and spend, and how it will be spent.

The constitutional language allows legislators to amend the budget bill by adding revenue or reallocating existing funds. However, the state constitution prevents legislators from passing bills that would create a budget deficit.

There is no official deadline in the state’s constitution for legislators to complete the budget bill, but each fiscal year begins on July 1.

For all intents and purposes, legislators on Saturday and just after midnight Sunday essentially were out of time to pass a budget bill since it was the last day of the session. Justice previously issued a call extending the regular session by one day to consider the budget, but that extension was, in practice, mooted by the announcement of his deal with the Senate.

So, with no official call for a special session on legislative record, lawmakers addressed the budget bill accordingly in the final minutes of the session.

By and large, members of the Senate passed the budget with the understanding it would be vetoed by the governor and that they would be called in for a special session to work out the details of their deal.

Consideration of HB 2018 was clouded for members of the House, who had no prior knowledge of the done deal and expressed frustration and some confusion about why the governor announced one budget plan at 10 p.m. Saturday, yet they were considering a vastly different budget just two hours later.

Carmichael said he anticipated a special session to address the deal to be called within the week.

Carmichael commended senators and Justice for working to come to an agreement, but he also said he felt bad about the fact that members of the House weren’t part of the deal at the time it was announced.

“The House needs to be fully informed and appraised of this and brought into the conversation,” Carmichael said. “As I said, what happened to them in terms of knowledge of this scenario was unfair. They didn’t I don’t mean it in the sense that there was anything nefarious about it. They just didn’t have a chance to look at it or fully vet it.”

The Associated Press contributed to this report.

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