The first task was to address the state’s budget deficit for the current fiscal year, ending June 30, which at times threatened to balloon to upwards of $150 million. The more formidable task was overcoming a Fiscal Year 2018 budget deficit that was approaching $450 million and expected to rise to almost $700 million in Fiscal Year 2019.
Gov. Jim Justice presented his vision in his “Save Our State” plan, which included a combination of the largest tax increases in the state’s history, a $1.6 billion infrastructure investment program that would create approximately 45,000 new jobs and a $100 million fund to jump-start economic development by giving newly appointed Commerce Secretary Woody Thrasher the necessary tools and incentives to attract investment and jobs to West Virginia. Plus, the governor’s plan gave our teachers a long overdue 2 percent pay raise.
We agree that Justice’s plan hit small businesses especially hard at a time when the state’s economy is sluggish and struggling to find its legs as the energy sector rebounds, albeit slowly. His alternative plan alleviated our concern and made the tax hit more equitable.
The House has been all over the board with its budget proposals. At first, House leaders attempted to devise a plan that eliminated state income taxes altogether and replaced them with higher sales taxes. That plan was rejected when it was shown it would increase the budget deficit. Now, House leadership has proposed assessing the sales tax on food again and making bigger spending cuts.
The Senate stayed true to its budget plan of reducing the size of state government and “living within our means.” Certainly, most families can relate to and understand the realities of cutting expenses to match income — we live it every day. Sadly, the Senate’s budget plan cuts higher education deeply again and does nothing to address a much-needed teacher pay increase to recruit and retain quality educators needed to instruct and train our future workforce.
However, simply balancing the budget does nothing to change the fundamental economics of how to grow our state’s economy in order to work our way out of this vicious cycle of decline. We agree with Justice’s vision of investing in infrastructure, workforce development, tourism and economic development to create opportunity, grow jobs and ultimately increase the tax base.
Of course, everyone wants the prize, but few are willing to put “skin in the game” in the form of additional taxes or elimination or reduction of some services provided by the state.
When the clock hits midnight tonight — due to the governor extending the Legislature’s regular session by one more day — the House and the Senate may agree on a compromise budget. But it’s not likely to be the final version. The governor has said he will reject any budget that cuts existing programs too deeply or relies too heavily on reserve funds.
The likely end result is that Gov. Justice will bring legislators back to the Capitol in a couple of weeks to work on a compromise budget that, hopefully, strikes the right balance of spending cuts and revenue enhancements from new taxes on telecommunications, sugary drinks, corporate activities and tobacco. In addition, the compromise budget should include investment in infrastructure and workforce development that can put West Virginia on a path of economic growth and enhanced quality of life for residents.
We hope, in the end, that the governor, House and Senate leadership can come together to address the immediate budget needs and agree on a way forward that can move our state out of 50th place in most economic rankings.
There can be no more “kicking the can down the road.”
