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Budget battle heats up


The Journal

CHARLESTON, W.Va.  — Majority leaders in the West Virginia Legislature discussed an approach to balancing the state budget during a Monday press conference, which rivals Gov. Jim Justice’s introduced budget bill in several ways.

The budget plan revealed by Speaker of the House Tim Armstead, R-Kanawha, and Senate President Mitch Carmichael, R-Jackson, does not rely on large tax increases, while Justice’s plan includes several tax hikes — including a half-percent increase to the sales tax and raising the gas excise tax by 10 cents per gallon.

Justice’s tax increases are expected to generate over $450 million.

According to Carmichael, the framework of a budget he and Armstead released on Monday is representative of the state’s best interests.

“This Legislature was elected to take our state in a new direction and create jobs,” Carmichael said. “Passing the largest tax increase in West Virginia history to fund hundreds of millions of dollars of new government spending is not the approach the people want. They want us to get government spending under control.”

The Justice administration projects a collection of $4.05 billion for the general fund in the coming fiscal year, and the governor’s proposed budget is set to spend $4.5 billion.

The budget plan coming from the Legislature, according to Armstead and Carmichael, will use the $4.05 billion revenue estimate and proposes various changes to Justice’s proposal.

The Legislature proposes elimination of the “Save Our State” fund, which would save $105.5 million; implementation of “smoothing” in the teachers’ retirement system, which would save $43.2 million; continuing 2-percent mid-year cuts implemented by former Gov. Earl Ray Tomblin, which would save $21.9 million; not including Justice’s 2 percent teacher pay increase, which would save $21 million; eliminating greyhound subsidies, which would save $15 million; ending the casino modernization subsidy, which would save $9 million, foregoing Justice’s $5.6 million tourism advertising increase; redirecting a $38.3 million transfer for the workers’ compensation fund.

The plan also proposes redirecting a $30.9 million general revenue/lottery surplus transfer; foregoing a general revenue transfer to the Division of Highways, which would save $11.7 million; accepting a $2.8 million increase to the beer barrel tax; and recognizing a wholesale liquor increase from 28 percent to 32 percent.

According to Armstead and Carmichael, the changes will leave a roughly $150 million spending-to-revenue gap. Lawmakers would then eliminate the gap by prioritizing spending in other areas of the budget, which would be implemented throughout the course of the normal budget process in the finance committees.

Armstead said the budget situation has put lawmakers in a tight position, but he believes this plan will work for the state.

“These actions will be difficult, but we owe it to our citizens to do everything we can to make their government run more efficiently without constantly asking for more money from taxpayers,” Armstead said. “Our citizens have asked us to make tough choices to get government growth under control, and this budget will do just that.

The republican leaders said they will present a passed budget documents to the governor before the end of the 6-day session on April 8.

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