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Senators concerned over Moody’s downgrade


The Register-Herald

CHARLESTON, W.Va.  — Senators expressed concerns Wednesday over the downgrade of the state’s general obligation debt rating as well as items related to closing the budget gap.

Five senators stood in Wednesday’s floor session to discuss their concerns, some who fear the budget will not be done without going into an extended special session and urging action to get it done soon. Some also were upset over name-calling, urging the need to put aside differences.

Moody’s Investors Services downgraded West Virginia’s general obligation debt rating Tuesday from Aa1 to Aa2, affecting about $393.6 million in outstanding debt.

The reason for the downgrade, according to the rating agency, is because of a “multi-year trend of growing structural imbalance between annual expenditures and available resources.”

Sen. John Unger, D-Berkeley, said he is frustrated with the rhetoric and the name-calling and that so far, he has not seen indications from the legislative body that there is a stable path forward.

“There is uncertainty we may not finish the budget at the end of the session,” Unger said. “We may be driven into June again to address the budget. Heaven forbid, and I hope my prediction is wrong, but we may have a shutdown of government July 1 because of the rhetoric going back and forth.

“Too many people have drawn the line saying they’re not going to cross it. If that’s the position we have that we’re not willing to work together on this, then the government will shut down and we will see what will happen to the people of West Virginia.”

Unger added that he worries about other issues becoming a distraction, such as the introduction of HB 2568, which would make the Bible the official state book of West Virginia.

“I’m sure people are concerned about that,” he said. “I don’t think my parishioners are concerned. Here we are introducing things like this that distract us from the real work and hard work we need to get done. Mr. President, we need to put partisanship aside. If we don’t, we are dying. We are dying as a state.”

Sen. Roman Prezioso, D-Marion, taking $125 million out of the Rainy Day Fund, as proposed by Gov. Justice for the 2017 fiscal year, will put West Virginia critically low in its savings account. He told Senate President Mitch Carmichael that it is “imperative we begin the process of the budget.”

“The more we fail to address that issue, the more questions are going to be asked, the more bond rating agencies will look at us,” he said, later adding, “I would encourage members to put aside differences. Let’s come together to work on this. The future of the state depends on this.”

Sen. Corey Palumbo, D-Kanawha, discussed Carmichael’s and House Speaker Tim Armstead’s comments after the announcement of the downgrade. Specifically, Palumbo took issue with Carmichael saying, “the old policies of simply raising taxes and spending more will only lead to further structural deficiencies and continued downgrades.” Armstead’s statement said, “The failed tax-and-spend policies of the past will not solve this problem.”

Palumbo said this has not been the way of the Legislature.

“I know these comments were made in response to the governor, where he called us all knuckleheads, but I don’t think this is helpful to the process,” Palumbo said. He later added, “Our constituents are tired of this. They’re tired of the finger-pointing. They want us to work together to solve this. When we are calling names and pointing fingers, people don’t like that. They want us to shut up and do our work and get this problem solved.”

Berkeley County Republican Craig Blair expressed ire over the “knuckleheads” comment.

“He stood just outside this chamber the other day and the governor did not call just Republicans or Democrats knuckleheads, he called each and every one of us knuckleheads,” Blair said.

Blair noted his disappointment in the governor’s in his budget proposal, which he said he finds offensive, would have proposed more cuts.

“I think, frankly, any eighth grader in the state could put together that budget,” Blair said. “It doesn’t take a whole lot of work if we’re going to get ready and do nothing but tax increases and $26.6 million in reductions is actually insulting to this body.”

Sen. Ed Gaunch, R-Kanawha, told his colleges that people are anxious about the budget not getting done in time.

“For some of us, it’s a revenue problem and for others, it’s a spending problem,” Gaunch said. “The correct answer is somewhere in the middle as it usually is.”

Senate Finance Chair Mike Hall explained that changes have been made to the process, including the designation of four subcommittees to to take on different areas of the budget. He said he hopes to get the budget expenditures document done at the halfway mark of the session.

“Where we are is way ahead,” Hall said. “We know the state wants us to give you a budget. We are not wasting our time.”

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