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Justice budget includes $450M in tax, fee increases for W.Va.

By JANET METZNER

The Parkersburg News and Sentinel

CHARLESTON, W.Va. —  A road program proposed by Gov. Jim Justice on Wednesday includes two major highways in Wood County.

Justice delivered his first State of the State speech to the Legislature, which reconvened on Wednesday, and proposed a 2 percent raise for classroom teachers, completion of highway projects and another 10 cents on the price per gallon of gasoline. He also apologized for proposing tax increases.

Titled by Justice as West Virginia’s “Save Our State Budget,” his proposal is a mix of spending cuts, increases to taxes and fees and a $123 million withdrawal from the state’s Rainy Day Fund as the state faces an estimated $500 million shortfall for fiscal year 2018.

“West Virginia is at a crossroads … and it must be emphasized there is a crisis here,” Secretary of Revenue Dave Hardy told a roomful of reporters Wednesday during a budget briefing.

Justice’s proposal features $450.15 million raised through a half-percent increase in the sales tax to 6.5 percent; eliminating tax exemptions for professional services and advertising and raising the gasoline excise tax by 10 cents a gallon from the current 20.5 cents to 30.5 cents.

The proposed general fund budget unveiled Wednesday would increase to about $4.8 billion, with total spending, including federal and other funds, at $12.9 billion.

Later Wednesday, during his State of the State speech, Justice apologized for the proposed tax increases.

“I truly, from the bottom of my heart, hate tax increases,” he said, adding it’s “the most painless way I think you can get out of this mess. If you don’t do this, you’re dead. You’re dead beyond belief.”

All of the proposed tax increases wouldn’t be permanent. After three years, he proposes eliminating the sales tax as well as a proposed 0.2-percent commercial activities tax he wants businesses to pay.

Justice’s proposal includes what Hardy says is a “bold and aggressive” $1.4 billion road program that shows Justice’s commitment to long-term economic growth. In addition, Justice proposes a $105 million Save Our State Fund, to be used for economic development and infrastructure investment.

The roads program “will invest heavily in roads and bridges,” and is expected to create up to 25,000 new jobs throughout the state, including temporary jobs, Hardy said.

Among the projects listed in the $1.4 billion Phase I of the program, the phase that lists projects that have passed most requirements and are ready to go, is the $135 million I-70 bridge rehabilitation and replacement project in Ohio County.

Phase I of the road program would include a $36 million widening of two miles of W.Va. 2 in Wood County to five lanes and a $15 million widening of W.Va. 14 to four lanes south of the city limits of Parkersburg.

The $1.5 billion Phase II includes W.Va. 2 widening projects in Hancock, Marshall and Wetzel counties. Those include a $10.5 million Hancock County project that widens it through New Cumberland; an $80 million project in Wetzel County from Proctor to Kent; and creates four lanes through Marshall County.

Justice considers his plan for $26.6 million in cuts as “responsible cuts,” stating alternatives could cost the state 3,000 jobs, in addition to cuts that could have eliminated all state parks and shut down dog and horse tracks, and veterans’ services.

His cuts include eliminating the eight regional education service agencies that provide services to public schools and cost the state more than $3.5 million per year.

The services RESAs provide include training bus drivers, and hiring special needs teachers, and managing substitute teacher schedules. They do collective purchasing for school districts, resulting in savings for schools for everyday items such as bread and milk.

Justice’s proposed cuts include a 4.4-percent cut to the funding that WVU and Marshall universities get from the state’s general revenue fund, $5.9 million from WVU, and $2.8 million from Marshall.

Other fees include raising the wholesale liquor markup from 28 percent to 32 percent. The last increase was in 2003, Hardy said.

The 2-percent pay raise for teachers does not include administrators, Hardy said.

“I’m ashamed that we can’t do more,” Justice said during his speech.

Justice also proposes appointing a “waste czar” who will find “any excess monies that have been shoved away and hidden.”

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