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Without budget deal, Legislature to take next week off


The Herald-Dispatch

The Republican-controlled Senate and House of Delegates approved resolutions to adjourn from the special legislative session until Monday, May 15. It ended two days after Democrat Gov. Jim Justice called lawmakers to Charleston to consider revenue and other measures affecting fiscal year 2018.

Lasting just less than 32 hours, the special session had legislators convening in their respective chambers for no more than 20 minutes at a time, with a bulk of the work being done behind the scenes in party caucus meetings and negotiations among legislative leaders and Gov. Jim Justice.

In the end, no legislative compromise was reached among all of the involved parties to bridge a $450 million funding gap between GOP-majority leaders in both legislative chambers and Justice.

A tax modification bill that reflected some agreements between Justice and Senate leaders was approved by senators Friday evening, but the measure died amid confrontational parliamentary maneuvering by members of both parties in the House of Delegates about 30 minutes later.

House Speaker Tim Armstead said he was glad the Senate supported the House’s wish to take a break from the session until a deal more favorable to House-majority leaders was reached.

“Over the last few days, we feel like other House members and Senate members would like us to be here and work through this,” Armstead said. “I truly believe it is important that the House and the governor and the Senate be in the room together, and I believe if we are able to do that, we can find common ground and find a solution that is a fair solution and helps us be able to construct a budget that is a responsible budget.”

Senate President Mitch Carmichael said May 15 was a day Senate and House leaders agreed to return to the Capitol with the goal that a tax deal will be reached by that date, even if it wasn’t the plan senators actually preferred.

“We don’t want to do it,” Carmichael said. “We would rather finish our work now, but it is the democracy we live in. It’s the right thing to do. They want to adjourn. We’ll adjourn.”

In a news conference following the end of the session, Gov. Jim Justice commended all members of the Senate and House Democrats for their efforts in supporting the tax bill.

Justice said he has been willing to talk with Armstead, but Armstead is unwilling to compromise on any issue.

“I’m willing to sit and talk,” Justice said. “This smoke and mirrors stuff of saying I wasn’t willing to talk to the House was silly. You saw the perfect example today that the House doesn’t even want to talk to Republican Senate members. How do you think they’re going to talk to me? For crying out loud, they don’t want to talk to anybody.”

Throughout the regular and special legislative sessions, Senate leaders mostly have favored tax reform that relies more on changing tax rates for sales, income and other taxes, while House leaders prefer to remove sales tax exemptions for certain services to generate more revenue for the state.

Leaders in both chambers want to make those changes using a base budget amount similar to that of fiscal year 2017, which is at about $4 billion.

Those philosophies also are in competition with Justice’s proposals that include increasing taxes to supplement the state budget, which, at its base, has been a higher dollar amount than GOP-majority leaders have been willing to support, at about $4.5 billion.

The only bill that made it to a vote for passage during the short special session this week was Senate Bill 1004, which was the result of compromises between Justice and Senate leaders, but was the one that ultimately died in the House.

Senate Bill 1004 was a tax reform bill that would have increased the state’s sales tax to 7 percent, eliminated the sales tax exemptions for data collection services and telecommunication devices, increased the corporate net income tax and lowered the income tax while creating a new income tax bracket. The bill also lowered the coal severance tax by between 1 or 2 percent, depending on the type of coal, with the largest severance tax decrease being for thin-seam coal.

The bill included measures to begin phasing out the income tax as well.

Carmichael called the bill “monumental” considering the compromises made between Senate leaders and Justice amid a budget crisis in the state.

“If – hopefully – the House takes this up and the governor signs it, this turned around a $400 million deficit into a tax cut for working West Virginians,” Carmichael said before the House rejected the measure. “It puts people to work and incentivizes work in our state.”

Armstead said the changes to the corporate net income tax and sales tax as well as the restructuring of the income tax brackets were problematic for House majority leaders.

“I’m fully aware that what we’re going to be accused of is standing in the way between the governor and the Senate,” Armstead said. “But the fact of the matter is every member, 134 members, of the Legislature and governor were all elected by the people of West Virginia to represent them and come to this building and do what we believe is right for them. And I believe very clearly that the reaction, the response, the votes that took place last night and tonight show the House did not believe this was the right course.”

Follow reporter Lacie Pierson on Twitter @LaciePiersonHD.

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