By March 27, 2017 Read More →

WV House Finance members get first glimpse of $4.27B budget plan

By PHIL KABLER

Charleston Gazette-Mail

CHARLESTON, W.Va. — West Virginia House Finance members got a first glimpse Saturday of what may be the House’s 2017-18 budget plan, a plan that contains $4.27 billion of general revenue spending — about $124 million less than Gov. Jim Justice’s budget plan.

“It’s a very balanced approach,” House Finance Chairman Eric Nelson, R-Kanawha, said after a lengthy budget overview presentation to the committee.

Whether it’s veto-proof is another question, Nelson conceded. Justice has said he will veto any budget bills that make severe cuts to state programs and services.

“I’ve not had discussions with the governor or his staff since this rolled out,” Nelson said Saturday afternoon of the budget overview.

Nelson said he believes the draft budget can become the basis for negotiations.

“Hopefully, we can get some ideas back from others,” he said.

The House plan relies on raising $158.5 million of new tax revenue from a controversial measure to set a personal income 5.1 percent flat tax, and would lower the sales tax to 5.5 percent but expand it to cover a broad range of personal and professional services that are exempt. It also would restore 3 percent of the sales tax on groceries, and impose taxes on telecommunications services — a tax proposal offered last year by then-Gov. Earl Ray Tomblin that was rejected outright.

However, that bill (HB2933) is itself on shaky ground after it survived a rare floor motion Saturday that it be rejected on first reading. That motion was defeated by a relatively narrow 44-50, with six absences, with tea party Republicans and left-leaning Democrats joining forces against the bill.

Nelson said that revenue is needed to ease cuts in the House budget plan, and said the expanded sales tax is more palatable to legislators than the governor’s proposal, which calls for raising about $350 million with a variety of tax increases in order to help close a $500 million shortfall in the upcoming budget.

The House budget also requires passage of a controversial measure to refinance the 40-year plan of annual payments to pay down the unfunded liability in the Teachers’ Retirement System. That proposal would free up $71 million to balance the 2017-18 budget, but ultimately would cost the state an additional $1.55 billion by extending those payments for eight years.

Under the House bill, $20 million of that would be directed at funding 2 percent pay raises for public school teachers.

“If some of that fails, we’ll have to look at some of these programs,” Nelson said of the total of $215.5 million in revenue increases in the House, which in addition to the sales tax legislation includes redirecting Workers’ Compensation old fund payments to raise $35 million, and keeping $11.7 million of general revenue funds that normally go into the state Road Fund, among others.

Among some of the proposed cuts in the House budget: Elimination of the office of secretary of Education and the Arts, $5.2 million; $1 million reduction to West Virginia Public Broadcasting (Justice’s originally proposed eliminating all $4.6 million of funding, but restored it in more recent budget plans); elimination of several Department of Health and Human Resources health promotion programs, including eliminating the $3.03 million of funding for tobacco education.

Higher education would face $16.6 million in cuts, including $1.28 million for Community and Technical Colleges. Four-year colleges would be cut $15.38 million, with nearly $10 million of that being the 4.4 percent cuts Justice proposed for Marshall and West Virginia universities.

Meanwhile, in the Senate, one of three legs of Gov. Justice’s plan to provide more than $2 billion of funding for building roads and infrastructure passed on a 28-6 vote (SB 477).

The bill would increase the state excise tax on gasoline by 4.5 cents a gallon, and would raise a number of Division of Motor Vehicles fees, many that have not increased since the 1970s, most notably raising the vehicle registration fee from $30 to $50 a year.

Senate Finance Chairman Mike Hall, R-Putnam, noted that the Senate added an additional $100 a year registration fee for hybrid vehicles, saying of the owners of the high gas mileage vehicles, “We’re all going to contribute and we’re thankful to do so.”

The increased taxes and fees should raise about $131 million a year — which Justice wants to put toward more than $2 billion of road bonds, but would be immediately available prior to any bond sale for road and bridge repairs.

“I have more complaints from citizens about the roads — twice as many — as any other issue,” Sen. Robert Plymale, D-Wayne, commented. “We have to do something about our roads.”

Other bills pending would expand the ability of the state Parkways Authority to sell bonds backed by tolls on the West Virginia Turnpike and any future state toll roads, and to increase the amount of bonds the state can sell that are backed by future federal highways funds.

Senators voting against the bill were: Azinger, Boley, Facemire, Romano, Rucker and Woelfel. The bill goes to the House.

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