By CHARLIE BOOTHE
Bluefield Daily Telegraph
CHARLESTON, W.Va. — With a legislative session now under his belt, state Sen. Chandler Swope, R-6th District, is ready for a looming special session on the budget, but not sure if a reasonable compromise can be reached.
A balanced budget is required, he said, so one must be passed.
“I’m optimistic that we will reach some agreement,” he said. “Whether I’ll be happy with it remains to be seen. I don’t know.”
House Bill 2018, which was vetoed by Gov. Jim Justice last week, set spending at $4.1 billion, about $300,000 less than what the Governor wants. It also included no tax hikes and deep cuts, especially to higher education.
Swope said many House members are adamantly opposed to any tax increase, a stance he does not share, which was reflected in the Senate’s version of the budget that included tax hikes for roads.
“The Governor (Jim Justice) wanted the highway tax revenue that the Senate passed,” he said. “It would raise $130 million a year that goes directly to highways.”
A gasoline tax of 4.5 cents a gallon is included as well as a hike in Department of Motor Vehicle fees.
Not only does Swope support that because of the state’s increasingly deteriorating roads and bridges, it is also an economic development tool.
“Personally, I’m in favor of the highway money because all of the data I have heard is the state is falling further and further behind on road and bridge repairs,” he said. “For every dollar we don’t spend on that now, it may cost five dollars down the road.”
Swope said money spent on roads is an “investment” that will help spur economic development, not just an expenditure.
“That is my position,” he said. “People may not like it because I’m saying it’s okay. But I ‘m getting four times as many emails saying let’s do it than not do it.”
Swope also supports the $1.6 billion referendum that will be sent to voters this fall to decide if the state should raise the money in bonds, more money dedicated to highways.
Although Del. Marty Gearheart, R-Mercer, is against any tax increases at all, he would support the referendum if a means to repay the bonds is in place that doesn’t require a tax hike.
“It (the referendum) may pass and I would not be upset about it,” he said recently. “But the hard work is finding the funding mechanism. It doesn’t define any of that in the bill for the bonding … “
Gearheart said an increase in the gasoline tax would hurt border counties.
Working with the House may not be easy, but working with the Governor is not easy either, Swope said.
The “supposed” last-minute budget agreement with the Governor on the last day of session is an example of that, he added.
“The Governor’s people started talking with Senate leadership late in the day, about 5 or 6 p.m. (on April 8), about a compromise with the Governor’s budget,” he said, adding that the Governor wanted the highway tax revenue, which the Senate passed.
“In the same conversation, he (the Governor) said he would be okay with the Senate’s proposal with the tax reform on personal income (to eventually eliminate personal income tax in the state while broadening and increasing the sales tax),” he said. “I am personally in favor of that plan.
The problem was, he said, legislators cannot vote on anything that wasn’t formalized and documented that late on the last day of the session.
The Governor blamed the Republicans for stopping that compromise, but Swope said Justice should have started that conversation several days before the last day of session.
It was a matter of parliamentary procedure that the compromise didn’t stand, he said, and there was never any intention to blindside the House on the compromise.
“It blew the roof off the House because they thought the Senate was doing a back door deal with the Governor,” he said.
For Swope, a budget compromise should include what is in the Senate proposal.
“The budget we put together I felt good about because it took the minimum amount out of the rainy day fund (the state’s cash balance that is important for solid bond ratings) and it minimized cuts in education … ,” he said. “We are committed not to overspend and try to hold the line. The budget has to be balanced.”
Swope also believes money spent wisely on education is a solid investment.
One thing that may help this year is the Governor’s revenue projections, which may be realistic, he added.
“In previous years, the Governor overstated projections of revenue,” he said. “But the experts I have talked to believe that Justice’s projections are reasonable and the odds are the collections will be in that neighborhood.”
Swope is also optimistic because state revenue for February and March trended “slightly upward” from last year.
“I am very hopeful that the upward trend will continue through the first of next year,” he said, adding the extra money could offset some of the funds taken from the rainy day fund.
Including the tax reform is important to Swope because he said it will eventually raise revenue by bringing more people into the state.
Under the Senate proposal, personal income tax would be reduced by 20 percent the first year and be gone in four years. A broader sales tax would offset any revenue losses and eventually increase revenue.
“Seven states have ended the personal income tax,” he said. “Those states are growing like gangbusters. People are moving in.”
Those people moving in boost the sales tax base as well as other economic drivers, like housing, he said.
“With the current or modified budget, we are just treading water,” he said. “Tax reform will help.”
However, Swope is not optimistic about support in the House.
“From the House point of view, tax reform is okay, but without increasing the sales tax,” he said. “They are firmly against any tax hike.”
With the House’s stance on taxes and the Governor’s unpredictability, Swope said a special session should be interesting.
“Everybody on the Governor’s side said they wanted to work with us, so we worked with the Governor,” he said. “He would come in and just talk and he would ask us if we can work with something and everybody would be agreeable.”
But after the conversation was over, Swope said the Governor may then just say the opposite of what was agreed to in those meetings.
“He is just puzzling,” he said. “He does political things like that (the manure display to represent the proposed budget approved by the legislature) and they don’t fit the context we are working with.”
Swope called the prank “childish.”
“He tells us he will work with us, then the terms change after the conversation,” he said.
One thing that has impressed Swope during his first foray into politics, though, is the caliber of his colleagues in the Senate.
“The people I work with in the Senate on both sides of the aisle, Republicans and Democrats, are admirable people,” he said. “They are the kind of people I am able to work with and be friends with. There is some partisan politics, but not as much as I expected. Their quality, intelligence, experience and dedication to public service is really energizing.”
Justice has not yet scheduled a special session on the budget, which has to be passed prior to the July 1 start of the next fiscal year.
See more from the Bluefield Daily Telegraph