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Phil Kabler: September at the capitol

By Phil Kabler
For the West Virginia Press Association
CHARLESTON, W.Va. — Returning to the Capitol after a three-month summer hiatus, legislators took their first public look at the recommendations of the Governor’s Blue Ribbon Commission on Highways last week.
While members of the Joint Committee on Finance agreed that increasing funding for state highways is critical, they haven’t reached agreement on how to raise those funds.
“I think our goal is to put a lot of things on the drawing board, and see what sticks,” said House Finance Chairman Eric Nelson, R-Kanawha, who said he expects highways funding to be a major issue during the 2016 legislative session.
Released in May after more than two years of study and public hearings, the Blue Ribbon report concludes that West Virginia needs to double the $1.1 billion a year it spends to build and repair roads, but recognizing that state taxpayers cannot bear that amount, proposes about $141 million in fee increases.
“We know a state of 1.8 million people cannot and should not under any circumstances be asked to come up with $1 billion a year,” Acting Administration Secretary Jason Pizatella said of the commission’s more limited funding proposals. Pizatella was chairman of the Blue Ribbon panel.
The commission’s centerpiece for state highways funding would be a $1 billion road bond issue – to be paid off by keeping tolls on the West Virginia Turnpike through 2049. Currently, the tolls are set to come off the Turnpike when the current bonds are paid off in 2019.
Keeping tolls on the Turnpike isn’t popular with legislators from southeastern West Virginia counties, including Delegate Ricky Moye, D-Raleigh, who commented, “My county has more than paid its fair share. We’ve paid our dues.”
However, Sen. Bob Ashley, R-Roane, said he’s traveled in 49 states, and driven on lots of toll roads in those states, noting, “It seems to be a popular way to pay for roads.”
Also during September interim meetings of the Legislature:
— A change in the way state employees are paid could end up costing the state more than $47 million in increased pay for salaried employees over the next 10 years, Legislative Manager Aaron Allred advised legislative leaders.
With a change from twice monthly to biweekly pay periods, salaries will be calculated on a 364-day year, creating a paycheck “leap year” about every 11 years, when employees will get 27 paychecks, instead of 26, during the year. While the so-called rounding error amounts to less than $200 a year of extra pay for most state employees, the size of the state payroll makes it significant, Allred said.
“Part of the problem here is size,” Allred told the legislative Post Audits Committee. “When you’re dealing with an annual payroll of $1.6 (billion) to 1.7 billion, that decimal point makes a difference.”
Allred echoed state Treasurer John Perdue’s call to halt further transfers of personnel to biweekly pay periods until the full impact on salaries and pensions can be determined. However, state Auditor Glen Gainer told legislators that having standardized pay periods for all state employees will save the state $4.5 million to $10 million a year by eliminating time-keeping errors and improper calculations of overtime and leave time – savings he said far outweighs the costs of the additional pay.
— A legislative audit concluded that the state Department of Administration owns more buildings than it has funds to maintain, resulting in ongoing issues with buildings that are in poor condition, and in some cases have become uninhabitable. That includes state office buildings in Clarksburg and Fairmont that deteriorated to the point they had to be demolished and replaced by new construction, at a cost of more than $42 million, the audit states. Likewise, Capitol complex Building 3, commonly known as the DMV building, sat vacant for about 4 ½ years before a $34 million renovation began this summer.
— Property Tax Division Director Jeff Amburgey told legislators at state Tax officials are working with the West Virginia Coal Association to come up with ways to reduce valuations for coal mining equipment located in idled mines. In the 2014-15 budget year, coal mining machinery accounted for $96 million of the $136 million of inventory taxes paid on industrial machinery and equipment, and legislators said they’ve heard of coal companies moving equipment out-of-state from idled mines to avoid the inventory tax. Sen. Art Kirkendoll, D-Logan, said a lower tax rate might encourage companies to keep equipment in West Virginia mines, in hopes of an upturn in coal markets.
Attachments (links will expire on 03/31/2016):1. Septemberatthecapitol.doc (23 KB) [application/msword]
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