Justice chief of staff warns of possible state shutdown

By LACIE PIERSON

The Herald-Dispatch

CHARLESTON, W.Va.  — “Out of an abundance of caution” Gov. Jim Justice’s Chief of Staff Nick Casey on Monday instructed West Virginia’s cabinet secretaries to start developing contingency plans for a potential shutdown in state government.

The memo came during the third day of a special session of the 83rd West Virginia Legislature, which is meant to deal with revenue and other measures affecting the state’s budget, but no budget bill had been drafted as of 2 p.m. Monday.

In the memo, Casey asked the secretaries to make a plan for how their departments would proceed in the event that the West Virginia Legislature and Gov. Justice do not approve a budget in enough time to implement it at the start of fiscal year 2018, which is July 1, 2017.

Casey noted some agencies may already have plans in place after 2016, when Mountain State lawmakers similarly found themselves in a budget standoff during a special session that lasted nearly a month during last May and June.

“As we continue to work toward a budget I have become concerned we may not have a budget on a timely basis to maintain the orderly flow of state services and activities,” Casey said in the memo. “Although the budget year ends June 30, 2017, as a practical matter, we need the budget by June 19, 2017 to make the necessary accounting and system adjustments to start a new budget year on July 2, 2017.

Casey told cabinet secretaries to identify essential and non-essential services on or before May 30.

A template for the plans will be made available to the secretaries this week, Casey said n the memo.

“If the budget can be resolved, which I hope will occur next week, then we will have eliminated the need to implement any plans,” Casey said in the memo. “If it is resolved, however, I believe the exercise of classifying services into essential and non-essential will better guide us during Governor Justice’s administration as to how we might refine and consolidate the way services are offered so as to maintain the appropriate level of services and reorganize financial efficiencies.”

Throughout the regular and special legislative sessions, Senate leaders mostly have favored tax reform that relies more on changing tax rates for sales, income and other taxes, while House leaders prefer to remove sales tax exemptions for certain services to generate more revenue for the state.

Leaders in both chambers want to make those changes using a base budget amount similar to that of fiscal year 2017, which is at about $4 billion.

Those philosophies also are in competition with Justice’s proposals that include increasing taxes to supplement the state budget, which, at its base, has been a higher dollar amount than GOP-majority leaders have been willing to support, at about $4.5 billion.

Justice and Senate leaders have found compromises that lead to a budget closer to about $4.1 billion and include some of his tax measures.

While no budget bill has been presented during the current special session, a tax measure did pass the Senate on May 5, but it was killed in the House, as House leaders favored taking a week away from the session to continue negotiations among legislative leaders and Justice.

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