By PHIL KABLER
CHARLESTON, W.Va. — Kansas: “No state could ever come up with a more destructive tax cut scheme than the one we enacted.”
West Virginia: “Hold my beer.”
When the fiscal note on the income tax repeal/consumption tax bill (SB335) showed it would blow a $600 million revenue hole on top of the current $500 million shortfall, wreak a lot of havoc on smaller state businesses and professionals, and put a higher tax burden on everyone making $50,000 or less, logic would suggest that would be the end of proposal for the foreseeable future.
Remarkably, members of the Senate Select Committee on Tax Reform looked at those numbers, and said, “Hmmmm … just needs a little tweaking.”
The tweaking likely will include setting economic thresholds that must be achieved before rollbacks of income taxes occur, which should render it moot while we await the launch of Gov. Jim Justice’s rocket ship ride for the economy.
To be charitable, committee Chairman Robert Karnes, R-Upshur, is not pushing repeal of income taxes in order to benefit his business, Financial Securities Information Systems, an IT maintenance business of some sort.
That’s because FSIS, of which Karnes is president, is located in Longwood, Florida.
A reader sent photos of the company’s headquarters at 821 Waterway Place, Longwood, and it looks like one of those small cinderblock storefronts that are so ubiquitous in the Sunshine State, and frankly, from the photo, it looks like it could be vacant. There’s no signage visible anywhere on the building, other than the lettering “FSIS” on the mailbox out front.
In response to questions regarding why his company is located in Florida and how often he works out of the Longwood office, Karnes e-mailed: “We work across North America. We are located in Florida, and have always been, in large part because most shareholders live in Florida and have no interest in paying West Virginia taxes.”
(Over the past decade, Karnes has founded or been an officer in a number of other companies based in central Florida, according to the Florida Division of Corporations, with names including Aerobay, Alviedo LLC, Dark Horse LLC, Orlando Apopka Airport South Condominium Association, Relionet, Shark Venture, X04 LLC, and Rouge Politics. With the exception of Dark Horse showing up on occasion under business names, Karnes has not listed any of those companies as business interests or sources of income on his financial disclosures to the state Ethics Commission over the years.)
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While the 2017 regular session passed the 30-day mark with no sign of the Legislature’s counterproposal to Gov. Jim Justice’s budget bill, two themes for the session have emerged: addressing the drug crisis with a series of bills increasing mandatory prison terms for offenders, and advancing a number of bills designed to kick labor unions while they’re down.
For the latter, that includes everything from the bill requiring written authorization for union dues to be a payroll deduction, to legislation cleaning up erroneous language in the state’s right-to-work law that is the subject of a legal challenge in Kanawha Circuit Court, and even legislation to bar union representatives from serving on the PEIA Finance Board.
As for the former, we’re just four years removed from passage of the Justice Reinvestment Act, which in the case of drug crimes, puts the emphasis on treatment and rehabilitation, drug courts and community corrections, in lieu of long prison terms.
That was done, on one hand, to reduce prison overcrowding and the high costs of incarceration for the state and counties; and on the other hand, because the preponderance of evidence is that it is the far more effective way to address the drug abuse problem.
(On Friday, the Senate got into a tussle over sending one of the lock ‘em up bills (SB219) to Finance Committee over the potential multimillion-dollar cost of imposing longer prison terms. Remarkably, the Senate initially rejected the motion -– which has always been a common courtesy to the Finance chairman in the past –- on a mostly partisan 15-18 vote.)
It’s all an example of how the once generally collegial body has descended into an “us versus them” attitude: i.e., drug users are criminals who need to be locked away in the penitentiary, labor unions are enemies that must be crushed, and simply being a member of the minority party is reason enough to be targeted.
The latter was on display last week when the Senate rejected the appointments of state Democratic Party chairwoman Belinda Biafore and Jo Marie Chandler, daughter of former state chairman Larry Puccio, to the Unemployment Compensation Board of Review, supposedly for a lack of qualifications.
(The argument they were unqualified might have carried some weight had it not been that both women had served on the board since January, each having ruled on more than 60 appeals, apparently with no issues about their abilities or judgment.)
Likewise, the argument their rejections had nothing to do with politics might have sounded less hollow had the Senate not tried just last year to reject six appointees with ties to the Democratic Party or to labor unions — including Biafore, who has the distinction of being targeted twice by GOP senators — before backing down when then-Senate Minority Leader Jeff Kessler, D-Marshall, threatened to have all bills read in their entirety.
In my years of observing the Legislature, Senate Confirmations has always been a pro forma body. Unless a nominee had a glaring conflict or issue, the Senate would almost always accede to the idea the vetting process by the governor’s office was sufficient.
The precedent that such a benign activity as confirmations can turn hostile does not bode well for the Legislature working cooperatively with the Justice administration to come up with a workable budget plan by July 1, does it?
(Quick aside: When I spoke with Chandler last week, I’m pretty sure that’s the first time I’ve ever talked to her (although I could have Craig Blair disease), and I found her to be soft-spoken, polite, and reluctant to say a critical word about anyone, despite the circumstances. Frankly, it was hard to reckon that she really is related to Puccio.)
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On a brighter note, legislation for West Virginia to enter into a multi-state compact to promote daily Cardinal passenger rail service was introduced last week (HB2856) with 11 co-sponsors (the maximum under House rules), and with a single committee reference to Finance.
The governor’s bill to restructure the Division of Tourism as the state Tourism Office (SB535, HB2899) also includes language that would allow the new agency to enter into such a compact.
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Finally, if you’re scoring at home, the Ethics Commission has received 14 complaints of possible ethics law violations so far this calendar year. At the same point last year (an election year), the commission had received 37 complaints.
However, as commission Executive Director Rebecca Stepto noted, of those 37 complaints, 22 were filed by the same person, 11 complaints each against two individuals. (We can guess which ethics-unfettered political operative that was.)
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