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WV Legislature still haggling over revenue, budget deal

By RUSTY MARKS

The State Journal

CHARLESTON, W.Va. — Members of the West Virginia House of Delegates and state Senate gaveled in and gaveled back out Monday, June 5, not much closer to a budget deal than when they gave up and went home May 24.

Democratic Gov. Jim Justice, Senate leaders and House leaders have been unable to agree on revenue proposals or a budget deal since the regular legislative session ended in April. Justice vetoed the budget the Legislature completed and twice called lawmakers back into special session to work on another budget.

Lawmakers again passed vastly different revenue bills May 24, with the Senate approving a revenue bill that included a hike in the sales tax from 6 to 7.5 percent and a gradual rollback of personal income tax rates. The House passed a revenue bill leaving the sales tax at 6 percent but removing many sales tax exemptions, and including income tax relief only for military pensioners and those who get income from Social Security benefits.

Justice has spent much of the intervening 10 days meeting individually with House Republicans, House Democrats, Senate Democrats and Senate Republicans trying to build consensus for a compromise. Justice spent about three hours with House Democrats the morning of Monday, June 5 trying to woo them to his side, those in the meeting said.

Justice’s latest revenue proposal includes raising the state sales tax from 6 to 6.35 percent, removing a number of sales tax exemptions and instituting a more modest rollback of income tax rates of 7 percent next year, with additional rollbacks possible if certain revenue triggers are met.

“The most recent plan has something in it that everybody has asked for,” said Delegate Eric Nelson, R-Kanawha, chairman of the House Finance Committee. But while the proposal has aspects everyone should like, he said everyone would also find things they don’t like in the plan.

“It’s all about trying to get a plan together that everyone will buy into and support,” said House Minority Leader Tim Miley, D-Harrison.

Main sticking points for the Democrats are replacing the revenue that would be lost by rolling back the income tax and a proposal to remove an income tax exemption on construction contracting services. Removing the exemption would boost revenue by about $92 million a year, but also would raise construction costs for consumers.

Miley said Justice has proposed exempting the first $15,000 of construction labor from sales tax, which would help the average homeowner who needs a new roof or a deck.

Some House Republicans also remain opposed to increasing sales taxes and other fees proposed by the governor.

Democrats and Republicans in the House spent much of the day in caucus, talking about revenue proposals.

Meanwhile, the Senate convened and adjourned almost immediately. Senate President Mitch Carmichael, R-Jackson, said the Senate would wait for the House to take action on a revenue bill.

Nelson said the House likely would do that in a strike-and-insert amendment to the revenue bill sent over by the Senate on May 24. That would save the trouble of drafting an entirely new bill.

The House did take up one piece of legislation on Monday. Delegate Cindy Frich, R-Monongalia, introduced a bill to abolish the state greyhound breeding subsidy. She said doing away with the subsidy would add about $15 million to the state budget.

The House and Senate passed a similar bill during the regular legislative session, but it was vetoed by the governor.

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