CHARLESTON, W.Va. (AP) — With no agreement on specific tax hikes, budget cuts or swipes into reserves, West Virginia lawmakers returned Monday to negotiate a long-delayed budget hampered by the coal industry’s downfall and low natural gas prices.
Democratic Gov. Earl Ray Tomblin called the Republican-led Legislature back for the first time in two months to rekindle talks about the 2017 budget, which starts July 1. They are still $270 million short, and every day they’re in session costs about $35,000 in taxpayer money. The session is expected to last at least several more days.
Tomblin, who determines lawmakers’ budget session options, has said the answer lies within several options to increase taxes. Tomblin proposed tax increases on sales, worth $190 million annually; cigarettes, other tobacco products and e-cigarettes, worth $78 million; and cellphone and landline use, worth $60 million. The administration already ushered in big cuts the past few years, Tomblin said.
Those tax increases haven’t been palatable for many Republican lawmakers who want government scaled down even further, particularly in the more conservative House of Delegates. Twenty-five of 100 House members, including three Democrats, have signed written commitments to oppose any tax increases not offset by equal tax cuts, according to Americans for Tax Reform.
While talks drag on, agencies are bracing for possible budget headaches.
Health officials warned Medicaid health care providers that they could see delays in claims payments. Higher education officials told high school counselors that PROMISE college scholarship letters were being delayed because funding still hadn’t been guaranteed. State employees, teachers and retirees have already gone through open enrollment for health benefits that incorporate $120 million in cuts, composed of higher copays, premiums and other costs.
Republican House Speaker Tim Armstead, who favors cuts and using reserves, has promised to fully fund the public health plans and PROMISE scholarships. The Tomblin administration aims to fund both as well.
Standard & Poor’s also dropped West Virginia’s bond rating a notch last month, citing long-term woes in the energy sector, particularly coal.
West Virginia doesn’t allow short-term budget plans of less than a year, like Pennsylvania does. Tomblin’s administration has a bill asking for the authority to furlough certain workers if there’s still no budget on July 1.
“The ramifications we’re all struggling with now will look like child’s play come June 30, if we don’t have a budget,” Revenue Secretary Bob Kiss said. “That’s why (Tomblin) has brought you here knowing there’s not an agreement.”
When they last met in March, lawmakers left in a budget stalemate. There’s no guarantee that the scenario has changed.
Previously, the Senate passed a 1 percent sales tax increase and a tobacco tax and e-cigarette hike, including a larger $1 per pack increase for cigarettes, to $1.55 per pack. In current negotiations, Tomblin is proposing a 45-cent increase, to $1.
The House killed all of the tax hikes without floor votes. There was even blowback from some Democrats who thought the tobacco tax hike didn’t go far enough.
Democratic House Minority Leader Tim Miley, who supports a $1 per pack cigarette tax increase, said even fewer delegates from his party now support the tobacco tax increase at all.
The 45-cent increase doesn’t appear to have the support of the Democratic caucus, Miley said.
The tobacco tax is heading to the Senate first and could go right to the House floor afterward, House GOP budget chairman Eric Nelson said.
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