By LACIE PIERSON
CHARLESTON, W.Va. — The public negotiations over how to balance the Mountain State’s budget began Monday when leaders from both chambers of the Republican-held West Virginia Legislature made their first counteroffer to Democratic Gov. Jim Justice’s two $4.5 billion proposals.
To offset a projected nearly $500 million budget shortfall for fiscal year 2018, the legislative majority proposed budget measures that would limit government spending and rely less on tax increases per se and more on tax reforms that aim to be revenue neutral.
That’s in response Justice’s proposals that relied on a mix of government control as well as tax increases and other tax reforms.
“This is a unique, novel, and conservative approach to budgeting,” Carmichael said. “You spend no more than you have. The people of West Virginia have presented this government with a revenue estimate of $4.055 billion. We will spend, and in the most compassionate and respectable manner possible, that amount of money to the agencies and entities of West Virginia to provide the needed and necessary government services within the budget we have been presented without $300 million of new taxes upon the people of West Virginia who are among the poorest in the nation.”
The Republican leaders also expressed a willingness to work with Justice to find more middle ground to balance the budget and pass a budget bill before the end of the 60-day regular legislative session on Saturday, April 8.
Carmichael referred to the Department of Health and Human Resources, the state’s public higher education system, and the state’s public K-12 education system as entities that legislators would “take hard looks at.”
“The people of West Virginia can no longer prop up this government with increased taxes,” Carmichael said. “We just can’t do it anymore.”
Among the points of similarity between the GOP legislative branch and the Democratic executive branch were increases to the beer barrel tax and the minimum amount of wholesale liquor revenue allocated to the General Revenue Fund.
Both parties also have made proposals to implement the “smoothing” of the Teachers’ Retirement System and redirect money from the Workers’ Compensation Fund.
Although it wasn’t mentioned during Monday’s news conference, GOP leaders also have drafted bills to increase the soda tax, make changes to the state’s sales tax and personal income tax, measures Justice has said he would support, although he had not commented on the House and Senate’s respective proposals as of Monday.
Where they differ is whether to cut government spending, potentially at the cost of jobs and resources for current state employees, or to generate revenue to meet spending expectations, most likely at the expense of taxpayers.
The legislators’ counteroffer rejected Justice’s proposed 2 percent pay increase for classroom teachers and his “Save Our State” Fund. They also want to forego Justice’s reallocation of $5.6 million for tourism advertising and an $11.7 million bump from the General Revenue Fund to the Division of Highways.
The GOP plan also calls for the continuation of 2-percent midyear cuts, which are expected to save $21.9 million.
“What we have done year after year, we have started with every agency assuming they’re going to get what they’ve gotten the year before,” Armstead said. “So, when you don’t give them that and you don’t grow government, that somehow is characterized as a cut. What we’re talking about is drawing the line sustaining the level of government we have currently. There are some areas where there will have to be reductions in order to do that.”
When asked whether the GOP plan would lead to job cuts, Carmichael said the goal of the legislative majority was to give each government entity more flexibility to manage the funds available, but it was possible those agencies would determine some positions were no longer needed in order to increase efficiency.
“We’re not telling any agency to get rid of someone,” Carmichael said. “We’re saying this is the amount of money you have to live within.”
When asked whether legislators could present a budget bill to Justice before the last day of the session, as Justice has called for, Carmichael referred to Senate Finance Chairman Mike Hall, R-Putnam, who said the Senate could pass a budget bill only after it had completed all other legislation that might affect the actual budget, a process which most often runs until midnight of the last day of the regular legislative session.
Carmichael also said he and Armstead met with Justice Monday to present their plan. He jokingly referred to Justice’s demeanor toward the plan, referring to him by his given name, James, further referring to a joke Justice said in how legislators can tell how serious he was, with “Jimmy” Justice being the most easy going and “James” Justice being the most serious.
“I continue, and I think the speaker also continues to keep a cordial relationship with the governor,” Carmichael said. “We are anxious to work with him. We are in no way degenerating into the name-calling aspect, this that and whatever. What we have, what this group of people has, is an absolute desire to do the right thing. These are not easy decisions.”
Dels. Carol Miller, Kelli Sobonya, Matt Rohrbach, and Chuck Romine, all R-Cabell, were among those at the press conference Monday.
Miller, the only local delegate to serve on the House Finance Committee, said the job of the legislature was to bring forth a balanced budget and to work within the framework of what resources were available to them.
“As every household understands, whatever amount of money you bring in, you shouldn’t exceed, or you get in trouble,” Miller said. “If you make $40,000 a year, you don’t budget to spend $45,000. You budget to spend about $38,000, hope you can go to King’s Island or the beach; hope your hot water tank doesn’t go; that you don’t need a new roof; but you give a little cushion. That’s what we’re trying to do with this budget is to live within our means. It’s time.”
Rohrbach, a moderate Republican who was called to meet with Justice shortly after the news conference, said it was obvious the state had revenue issues, making it all the more important for officials to make sure the state was living within its means.
“We have to balance the needs of state government versus the revenue needed to fulfill it,” Rohrbach said. “I’m sure there will be some give and take. I doubt that the governor’s budget at $4.5 billion is where we eventually wind up, and I don’t think what you heard today, at $4.055 billion is where we’re going to wind up. I suspect we’re going to end up in the middle, probably about where we were with this last budget, and figuring out how to fill that hole in.”
Sen. Mike Woelfel, D-Cabell, was not at the news conference, but a quick review of the budget had him concerned about certain proposed taxes but also eager to study the budget.
“I’m willing to examine the budget proposal carefully and deliberate on it. I’m troubled by the consumption tax,” Woelfel said. ” I completely agree with living within our budget. I do see budget cuts I like in here. I think we should continue to downsize government because we have many fewer people and the government has to live within its means.”
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