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Revenue deal dies at WV Capitol

By LACIE PIERSON

The Herald-Dispatch

CHARLESTON, W.Va. — West Virginia lawmakers on Tuesday came close to a revenue deal for fiscal year 2018, only to have the deal die early Tuesday evening, setting off a new round of bargaining over the state’s budget, minus the additional revenue that would have come with the revenue deal and plus some drastic cuts.

Meetings among committees and legislative bodies began at 9 a.m. Tuesday and ended when the House of Delegates adjourned just before 9 p.m., culminating the end of a day that included a deal made and broken among members of the conference committee on House Bill 107, designed to generate some revenue through changes in tax code, and a budget passed by the Senate that included $70 million in cuts, most of which were split almost 50-50 between the state’s public higher education system and the West Virginia Department of Health and Human Resources.

The West Virginia Senate passed a budget that reflected the most up-to-date revenue estimates for fiscal year 2018 just before 8:30 p.m., and the House received the report that the bill was passed at 8:45 p.m.

The Senate’s budget assumed $4.225 billion in revenue for fiscal year 2018. That amount includes anticipated revenue from the governor’s proposed roads bills, which reflect increases to taxes on gasoline and Division of Motor Vehicles fees and changes affecting the authority of the West Virginia Parkways Authority.

The House Finance Committee on Tuesday advanced a bill affecting the gas tax and DMV fees, and the measure will be on second reading Wednesday in the House. A measure affecting the West Virginia Parkways Authority also is in the hands of the House Finance Committee, which has not taken action on the bill since May 24.

Lawmakers originally passed a $4.1 billion budget measure on the last day of the regular legislative session on April 9. That budget largely relied on spending cuts, and Gov. Jim Justice vetoed it on April 17.

The Senate’s budget bill, Senate Bill 1013, was placed on first reading in the House Tuesday, where Speaker Tim Armstead, R-Kanawha, said he expected it to be vetted by House members Wednesday.

At about 4 p.m. Tuesday, the House Finance Committee advanced its own budget, House Bill 115, which was a $4.281 billion measure that assumed there would be revenue from the now-dead House Bill 107.

Armstead said the House’s budget would be amended to reflect the lack of revenue from HB 107, and he said the House was less supportive of cuts to higher education than the Senate.

The conference committee’s report on HB 107 kept the state’s sales tax rate at 6 percent, and it did not make any changes to the coal severance tax.

Most significantly, the report did not reduce or otherwise affect the state’s personal income tax, which was the biggest priority for Senate Republicans.

House Bill 107 would have required West Virginians to begin paying sales tax on services and goods that are currently exempt from it, which was estimated to bring in $86 million in fiscal year 2018.

Among the provisions of HB 107 had been eliminating the income tax on military retirement income and a two-phase elimination of income tax on Social Security income for certain households. It also included an increase in the personal income tax exemption for certain households and an increase in the historic building rehabilitation tax credit.

With the loss of those provisions, Armstead said he was eager to get to work on finalizing a budget plan within the means afforded to lawmakers.

“I’m hopeful we’re getting close to the end,” Armstead said Tuesday night. “I think the Senate and House budgets are not that far apart. There are some issues that need to be resolved. Whether the governor is going to accept them is up to him. It obviously doesn’t spend as much as what he wanted to spend, but it is spending his new revenue estimate. I think we’ll work hard tonight and tomorrow to get some resolution on those budgets.”

The death of HB 107 was the most budget-altering event of the day, as lawmakers were hopeful to get a chance to vote on the provisions laid out by the committee.

The committee was appointed June 7.

Conference committees are appointed when members of both chambers are unable to reach an agreement on a bill that has passed both chambers but with some differences.

The Conference Committee on House Bill 107 includes five senators and five delegates, with each chamber represented by three Republicans to two Democrats to reflect the GOP-majority in both chambers.

Representing the Senate were Majority Leader Ryan Ferns, R-Ohio, Craig Blair, R-Berkeley, Ed Gaunch, R-Kanawha, Minority Leader Roman Prezioso, D-Marion, and Glenn Jeffries, D-Putnam. Representing the House were Finance Committee Chairman Eric Nelson, R-Kanawha, Majority Whip Carol Miller, R-Cabell, Paul Espinosa, R-Jefferson, Brent Boggs, D-Braxton, and Dave Pethtel, D-Wetzel.

If conference committee members reach a consensus, they report their agreement to the members of their respective chambers. The members of the House and Senate would then vote on whether to accept the report, which will represent the final version of the bill.

In order for the report on House Bill 107 to pass, it had to receive support from the majority of members from each chamber, meaning it needed support from at least three senators and three delegates, regardless of the margin of difference among the entire committee.

During their afternoon meeting, committee members approved the report in a voice vote, but when it was time to sign the report, not enough of the senators on the committee signed it, ultimately killing the report.

It was understood Tuesday that none of the Senate Republicans signed the report, and debate in the Senate Tuesday indicated the two Senate Democrats on the committee did sign it.

All five of the House members on the committee signed the report.

In a joint statement, the three Republican members of the Senate said GOP senators never wavered from their stance on income tax reform or the budget.

“Without meaningful tax reform, the only option that remains is to pass a budget that spends only to the revenue line we are provided by the governor and make significant cuts to live within our means,” the senators said in the release, prior to the Senate passing its budget Tuesday. “Throughout this process, Senate Republicans have been more than willing to compromise on our position and to find an outcome that could benefit all West Virginians. Unfortunately, we do not believe the version of the bill considered in conference achieves that goal. With no option left on the table, we will move forward with passing a budget that lives strictly within our means.”

Tuesday was the 17th day of the first special session of the 83rd West Virginia Legislature.

Fiscal year 2018 begins July 1, 2017, and the state government would shut down, except for essential services, if a budget isn’t passed.

The cost for the legislative session is $35,000 per day if every lawmaker is present in both chambers when both legislative bodies convene.

Both the Senate and the House will reconvene at 11 a.m. today.

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