CHARLESTON, W.Va. — As a state budget bill heads to the governor for approval, including a raise in tobacco taxes, a segment of the Legislature’s Republican majority was working to defeat any kind of tax increase to offset deficits in the proposed state budget.
The GOP-led House voted 63-35 Monday to approve higher taxes on cigarettes, e-cigarettes and other tobacco products, which are expected to generate $98 million to make up for a $270 budget shortfall. The Senate already passed the measure in a deal worked out with Gov. Earl Ray Tomblin.
The measure includes a 65-cent per-pack tax increase on cigarettes.
The bill heads to Tomblin’s desk for his signature.
In May, the House defeated a $76 million bill with a 45-cent a pack cigarette tax.
Many pointed to the efforts of the Liberty Caucus of West Virginia at defeating the first bill with the 45-cent tax increase.
The Liberty Caucus is a grassroots membership organization dedicated to working within the Republican Party to advance the principles of individual rights, limited government and free markets, the group’s national website states.
Delegate Michael Ihle, R-Jackson, a member of the caucus, said the group has influenced the budget debate this year.
“The Liberty Caucus has had a substantial impact in the tax and budget debate over the past few weeks,” he said. “We have worked tirelessly to hold elected leaders in both parties accountable.
“Many of those individuals have made promises to their voters not to raise taxes that they did not keep. We believe a man’s word is his bond. Like Jiminy Cricket, we are the conscience of state government,” Ihle said.
Ihle promised from the start not to raise taxes. It was something he felt was important to do for the people he serves and was not influenced by any outside interest groups, he said.
“We all know that state government is far too big and wastes so much money that raising taxes should simply not be an option,” Ihle said. “The Liberty Caucus presented over $100 million in cuts, none of which would have harmed services but instead forced government to use millions it hides in slush funds.
“From that list, over $80 million simply restored various spending accounts to fiscal year 2015 funding levels, or returned funding levels back to the lower figure the governor proposed in the draft budget,” Ihle said. “Another $20 million we proposed was to defund Common Core Smarter Balance testing. Parents, students, and teachers hate this. We should listen to them and never spend their money on things they hate, especially in a crisis,” Ihle said.
Delegate Frank Deem, R-Wood, said he has traditionally been against tax increases, but acknowledges situations present themselves and lawmakers have to consider them.
“Sometimes things come along, especially in this session,” he said.
Deem was asked to sign a pledge, which was circulated around the Legislature, not to raise taxes which he did not sign. However, 26 people did sign it.
Some of those people ended up voting for the cigarette tax increase that just passed, he said.
Deem said if they hadn’t passed the 65-cent tax, legislators would still be in session trying to balance the state budget.
People who sign pledges are only working for themselves and not for the people of the state, Deem said.
“I have had a history of voting against tax increases,” he said. “There comes a time when you have to be willing to compromise. If not, you put yourself in a box and you don’t have room to negotiate.”
Deem, who reads a lot of history, has been reading about the Marshall Plan where the U.S. provided over $12 billion in economic support to help rebuild Western European economies after World War II. A lot of compromises were put in place for the plan to move forward, he said.
“That is a great example of compromise,” Deem said. “Compromise is sometimes the only way to get anything done.”
The Legislature increased several budget line items above what the governor was asking for, Ihle said.
As the result of the compromise bill passed, Ihle said, West Virginia now has its largest tax increase in a generation.
“As lovers of liberty, the Liberty Caucus stands up to both the government and our party when they’re wrong,” Ihle said. “Unfortunately, we fell short.”
The caucus is concerned the tax will end up harming non-smokers and smokers alike across the state as $100 million will be removed each year from West Virginia’s economy and turned over to the state to fund existing operations, Ihle said.
“In one fell swoop, the hard work of the past two years by our brand new Republican majority to fix our state’s terrible economy has been undone by a regressive tax aimed at our poorest citizens,” Ihle said. “The next time someone says to vote for Team R or Team D to protect our wallets or our freedoms, we should remember this day and laugh.
“At least that will help us take our minds off the country’s worst economy,” Ihle said.