Thursday, in a special announcement made in the Lower Rotunda of the state Capitol, Gov. Jim Justice vetoed a $4.1 billion budget for Fiscal Year 2018 that had been approved by the Legislature.
The veto means lawmakers will have to be called back into special session in order to adopt a spending plan before the July 1 start of the new fiscal year.
Justice presented his own budget plan to lawmakers in early February. He initially proposed a $4.5 billion general revenue budget, requiring nearly $400 million in new taxes, including a 0.5 percent increase in the sales tax and a 0.2 percent gross receipts tax, while cutting spending by $26.6 million. Included in the plan was a “sunset provision” to eliminate the new taxes in just four years.
Justice’s budget also included new funding for a “Save Our State” economic development and business recruitment plan, a 2 percent pay raise for classroom teachers and a significant increase in funding for state tourism promotion and advertising.
Republican leaders in the House of Delegates and state Senate balked at the proposed record-setting tax increases and meager expense cuts in the state’s operating budget.
Subsequently, Justice unveiled an alternate budget plan, commonly called Budget 2.0 — a $4.394 billion proposal requiring $224 million in new taxes. Justice’s new plan significantly cut his earlier rates for the sales tax and the gross receipts tax, but it proposed tax increases on cigarettes and sugary soft drinks.
In the final hours of the Legislature’s regular session, the governor turned to the Senate to come up with a deal that would salvage most of his budget proposals, while incorporating a Senate plan to phase out income taxes and replace them with a broad-based 7 percent consumption tax, as well as a 3.5 percent tax on groceries.
But the budget passed by the Legislature didn’t include any of those revenue enhancements. Nor did it include Justice’s plan to fix the state’s highways. That plan would have raised DMV fees and turnpike tolls to help fund $1.6 billion in road and bridge construction and result in the creation of 48,000 construction jobs.
The House and Senate instead approved a budget that cuts $110 million in spending, most of that from higher education — hitting WVU and Marshall extremely hard — and from the Department of Health and Human Resources.
The Legislature’s budget plan also takes $90 million from the state’s rainy-day fund. That move would take the state below the target of having a reserve fund that equals at least 15 percent of the annual general operating budget, as preferred by Wall Street bond rating agencies.
During his veto announcement Thursday, Justice used whiteboards to lay out the cuts contained in the Legislature’s budget, and then he ripped into lawmakers.
“The Republicans passed this budget and called and called and called and said, ‘Surely you are going to veto this, because we don’t want to own it. We want you to veto it,’” Justice said. “It’s just a game, and it doesn’t mean anything.”
Justice said he’s pushing back against what he described as immature antics at the Capitol.
“We don’t have to be a bunch of babies. We don’t have to be a bunch of children. We don’t have to be one-upping the other party all the time,” Justice said. “If we’re this way, you know what we’ll get done? Nothing.”
Sadly, once again the Legislature has opted to “kick the can down the road” when it comes to dealing with the state’s budget issues. Lawmakers chose to do that instead of making difficult decisions on targeted budget cuts and required revenue enhancements to address infrastructure needs (roads and bridges), workforce development (higher education) and economic development (tourism and commerce). In other words, everything that we must invest in to grow and diversify our state’s economy.
The budget as approved by the House and Senate sets us up to be right back in the same position next year, facing yet another projected $400 million budget deficit.
Therefore, The Exponent Telegram editorial board believes that Gov. Justice was “justified” in vetoing the Legislature’s budget and making a special legislative session necessary.
A compromise budget must make responsible cuts in state operating expenses. It makes no sense to cut DHHR programs when doing so will cause the state to lose over $170 million in federal funding. It makes no sense to cut higher education funding when WVU has proven to generate a 10-to-1 return-on-investment. It makes no sense to pass up on a job creation plan that would put 48,000 people to work in construction to fix our roads and bridges. The list goes on and on.
West Virginia has a bright future if our elected leaders, business and labor can agree on a vision and a path forward to prosperity. Simply doing the same thing year in and year out has predictable results — 50th place. We deserve better.