By DANYEL VANREENEN
The Journal
CHARLESTON, W.Va. — The GOP state budget proposal is in direct opposition to Governor Jim Justice’s, and Republican’s have said their proposal respects West Virginian tax payers.
Delegate Paul Espinosa, R-Jefferson, said the GOP proposal is straight forward. The focus of the budget is to keep the state from living above its means — meaning the state won’t spend more than the revenue it generates.
“It’s not prudent to spend more than you take in,” Espinosa said. “One challenge with the Governor’s plan is that the $4.5 billion in spending flies in the face of the $4.05 billion projected for the general fund.”
Delegate Eric Householder, R-Berkeley, agreed that the focus of the GOP budget was to make sure West Virginia is not spending more than it takes in.
In addition to rightsizing government, Householder said the House is focused on state tax reform as well. The GOP’s proposed budget still leaves an approximately $150 million deficit, and if lawmakers can’t close the gap under the proposed plan, cuts will need to be made, according to Householder.
The Departments of Health and Human Resources, K-12 and Higher Education — which makes up 80 percent of the state budget, according to Householder — will be hit the hardest by cuts. Householder said the House held a meeting Wednesday with the department of Higher education to discuss what cuts can be made and what cuts would like for the department.
“We’re trying to get input so all our options are on the table,”Householder said. “I think the meeting was pretty informative.”
The main concern was ensuring tuition did not increase for schools, but Householder said he’s excited to see what opportunities for consolidation and efficiency are available.
Although cuts may be necessary, Householder said the House is trying to raise revenue through a broader sales tax.
Although the House is may be divided along party lines on some issues, Delegate Jason Barrett, D-Berkeley, said sales tax may be the answer to West Virginia’s revenue problem.
For every one percent in sales tax, the state currently generates $25 to $30 million in revenue, according to Barrett.
Householder said the state currently has many exemptions for sales tax that could potentially generate more revenue. Householder said the House has proposed to eliminate a number of exemptions to increase income.
Householder said the proposed sales tax reform would still provide exemptions for food and advertising, and after January 2018, the sales tax would be reduced to five percent.
Although Barrett said the state does need to find a source of long-term revenue, he said the GOP’s proposed budget was incomplete.
“(The budget) lacks a vision for the future of West Virginia,” Barrett said. “It doesn’t address long term economic issues.”
Although Barrett said cuts do need to be made, he said focusing on advertising and marketing is necessary to attract people to come to and stay in the state.
“We’ve got to bring people in, and we must market the state,” Barrett said.
The budget proposal is also incomplete because it falls $150 to $170 million short, according to Barrett.
“We’re close to crunch time with not a lot of answers,” Barrett said.
In the long run, Barrett said expanding gaming in the state might be a solution. He said the current GOP proposal would end the casino modernization subsidy, which would hurt the gaming industry in the Eastern Panhandle and across the state.
Barrett said casinos pay about 60 percent of the revenue generated from gaming machines in taxes to the state. Currently, the state gives part of the money the casinos generate back to them for the purpose of renovations and modernization, according to Barrett. He said this fund helps West Virginia facility maintain a competitive edge, and it does not use tax payer money.
“West Virginia needs every competitive advantage it can get,” Barrett said. “By cutting this fund, that’s $9 million that the gaming industry won’t be able to use to modernize.”
Regardless of disagreements between delegates, Barrett said the GOP budget may face issues in the Governor’s office. He is concerned Justice may veto the GOP proposal, which would delay any action.
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