By PHIL KABLER
Charleston Gazette-Mail
CHARLESTON, W.Va. — With a budget bill that Gov. Jim Justice has said he plans to veto after it reaches his desk, the Governor’s Office resumed talks Monday with legislative leaders to smooth over indignations and try to come up with a budget plan the governor can sign.
“We’re not back to square one, because we’ve got the framework for an agreement,” Senate President Mitch Carmichael, R-Jackson, said Monday, shortly before meeting with the governor.
Monday afternoon, House Speaker Tim Armstead, R-Kanawha, met with Justice chief of staff Nick Casey.
According to House spokesman Jared Hunt, Armstead re-emphasized at that meeting House Republicans’ opposition to tax increases and urged signing of a belt-tightening $4.102 billion budget bill that passed the Legislature early Sunday.
“The governor needs to accept the reality that his tax increase proposals simply do not have the support of the vast majority of elected representatives in the Legislature,” Armstead said in a statement.
The bill passed Sunday has little in common with a plan that Justice said was being worked out Saturday night that he said, “puts us on a pathway to prosperity.”
During a routine end-of-session news conference Saturday night that governors traditionally hold in the waning hours of the last day, Justice dropped a bombshell, saying he was “right on the cusp” of a budget agreement that would avoid devastating cuts to higher education, public education and health services.
The purported agreement is essentially a compilation of Justice’s proposals to grow the economy and build roads, using many of the tax increases he proposed, along with provisions of a failed Senate bill that would raise the sales tax 1 percent and partially restore the sales tax on groceries, while phasing down income taxes and severance taxes on coal and natural gas.
Justice said Saturday the proposal was the result of email exchanges with Carmichael Friday evening that culminated in talks throughout the afternoon and evening on Saturday.
There was, however, one issue — House leadership had little or no input on the plan, and at about 10:30 p.m. Saturday, Armstead angrily rejected a request by Carmichael to hold a joint House-Senate Republican caucus to go over the tentative deal.
As House Finance Chairman Eric Nelson, R-Kanawha, said on the House floor Sunday, “Whether the governor’s made a compromise, it sure as hell wasn’t communicated with this body.”
“There was never an effort to exclude the House,” Carmichael said Monday, noting that his negotiations with the Governor’s Office over the complex, 400-page bill were taking place in starts and fits during brief breaks between Senate floor sessions.
Carmichael said Monday he’s hopeful talks can continue between the Governor’s Office and both houses on the compromise proposal that was being worked out Saturday.
“I think it’s the right path,” Carmichael said. “I don’t want to raise anyone’s taxes, and he doesn’t want to cut the budget as much as we did.”
He said the compromise plan would create jobs and economic opportunities.
“That’s exactly what we need now,” Carmichael said.
Justice spokesman Grant Herring said the governor is reviewing the budget bill passed by the Legislature, adding, “The governor will continue to keep an open line of communication with the leadership in both the Senate and House of Delegates, and with members of both parties, concerning his expectations on the budget process going forward.”
As the budget compromise collapsed in the waning moments of the 2017 regular session, the Senate instead took up a budget plan that had been worked out between the House and Senate Finance Committees after separate bills introduced in each house to raise tax revenue had failed.
The budget bill passed by the Legislature spends $4.102 billion in general revenue — the same amount as the Senate’s no-new-taxes plan, a bill that Justice said last week he would veto “in a millisecond.”
It cuts about $138 million from the House’s budget plan — which relied on a bill that failed in the Senate that would have raised that amount of revenue by eliminating a number of exemptions on sales taxes, including an exemption on telecommunications services, primarily cellphone service, that would have raised $60 million.
It’s also more than $290 million less than the governor’s budget proposal, which relied on passage of $236 million in new taxes, including an increase in the sales tax, a new gross receipts tax on businesses and a surcharge on residents with incomes of $200,000 or more.
Besides cuts, the budget includes no funding for key Justice proposals, including the Save Our State fund for site preparation, workforce training and other economic development incentives to recruit new businesses to the state. Justice had sought $35 million a year over three years to fund that program.
It also includes no pay raises for any public employees, including a 2 percent pay raise Justice sought for classroom teachers, at a cost of $21 million.
Justice on Saturday said of the potential failure to fund his initiatives, “The consequences will be shameful on all of us.”
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