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Leadership introduces budget framework; Justice says it won’t save the patient

By ANDREA LANNOM

The Register-Herald

CHARLESTON, W.Va.  — Legislative leadership announced its framework for the budget, saying the goal is for the state to “live within its means” by staying within its $4.055 billion revenue estimate.

However, Gov. Jim Justice, who has referred to the state as a dying patient, said the proposal “will not save the patient.”

In a Monday press conference, House Speaker Tim Armstead, R-Kanawha, and Senate President Mitch Carmichael, R-Jackson, announced the Legislature’s approach to balance the budget, including 2 percent mid-year cuts, increasing the beer barrel tax and increasing the wholesale liquor tax.

“This is a plan that not only controls spending but the focus is on jobs and opportunity for West Virginia,” Carmichael said. “It’s a unique and novel conservative, responsible approach to the budget. We are doing what every family in West Virginia must do. The fundamental principle is to spend no more than you have.”

They said they are committed to having the budget passed before the end of session on April 8.

“We are committed to passing a budget before end of session which has not been done for many years,” Carmichael said.

Armstead echoed this point, saying the state “simply needs to spend what it has.”

“Every single family I know does just that,” Armstead said. “When you do a household budget, you spend what you have. You don’t go out and say I would love to spend more because this is a great idea to do this or that.”

Carmichael said the governor presented a revenue estimate of $4.055 billion, illustrated with one large check for that amount that was showcased during the conference.

They compared it to Justice’s proposal of $4.5 billion, which they illustrated with a large check with Justice’s name on the bottom with “returned, non-sufficient funds” marked in red over it.

“Like every family in West Virginia, we can’t write that check,” Carmichael said. “You can’t simply write that check and cash it. It’s insufficient funds.”

Carmichael and Armstead said part of the plan includes taking a hard look at things that have typically been “off the table” — the Department of Health and Human Resources, K-12 education and higher education in particular.

Other elements to their proposal are:

• Eliminating the “Save Our State Fund” in the governor’s proposal, which they said could save $105.5 million.

• Implementing “smoothing” in the Teachers’ Retirement System, which Justice also had mentioned in his second budget proposal. They said this could save $43.2 million

• Continuing the 2 percent mid-year cuts that former Gov. Earl Ray Tomblin implemented, which could save $21.9 million.

• Not including Justice’s proposed 2 percent teacher pay increase, which they said would save $21 million.

• Eliminating greyhound subsidies, saving $9 million.

• Ending the casino modernization subsidy, saving $9 million.

• Not including Justice’s proposed $5.6 million tourism increase.

• Redirecting a $38.3 million transfer for the Workers’ Compensation Fund-collections.

• Redirecting a $30.9 million General Revenue/Lottery Surplus.

• Foregoing a General Revenue transfer to the Division of Highways, saving $11.7 million.

• Increasing the beer barrel tax from $5.50 to $8 per barrel.

• Increasing wholesale liquor tax from 28 percent to 32 percent, which does not require legislation.

These changes would leave an approximate $150 million gap, which legislators say they will eliminate by prioritizing spending in other areas of the budget. These measures will be implemented in the budget process in the House and Senate Finance Committees.

Carmichael said lawmakers would not be telling agencies to cut people, but to allocate an amount to an agency to spend and leave it to agencies to decide areas of efficiencies within that budget and giving flexibility to agencies to use those funds.

He added that supplemental appropriations can be made to areas that may need additional money.

“We think we can find areas of efficiency that are compassionate and responsible manner to deliver reductions but I hesitate to call them reductions,” Carmichael said. “We are spending every penny West Virginia taxpayers have given us without raising taxes.”

When asked if they would support tax increases, Carmichael said he would in the context of tax reform.

“In the abstract and in individual elements of tax increases based solely on tax increases, we have very little if any interest in supporting them,” Carmichael said.

Armstead agreed, saying the House is working on a tax reform plan as well.

Justice’s budget proposal has included a 1 cent per ounce tax on sugary drinks and a 50 cent per pack tax on cigarettes.

Carmichael said in constructing the budget, the big part is agreeing on the framework and the actual construction of line items is in the process.

Following the press conference, Justice issued a statement on their budget proposal, saying he didn’t think it would fix the problem.

“Bless their hearts, but the Legislature’s framework will not save the patient,” Justice said in the news release. “What we saw today from the House and Senate only kicks the can around the block. It doesn’t give our classroom teachers a pay raise, it doesn’t increase tourism advertising, it doesn’t bring jobs, and it lacks the tools to jumpstart our economy.

“The clock is ticking; let’s work together to pass a responsible budget that brings jobs or we will die 50th. My Save Our State plan will get us out of this budget hole and put us on a pathway to prosperity. I’ve heard a lot about the need for more cuts, but I haven’t heard any specifics from the Legislature.”

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