Randy Yohe Published

2023 State Budget Process Will Be Contentious, According To Officials

Gov. Jim Justice giving his 2018 State of the State address.

In a presentation before the legislative Joint Committee on Finance, Revenue Secretary Dave Hardy highlighted specific increases in what’s heading toward a $2 billion revenue collection surplus.

Hardy said state interest income jumped from $21,000 last year to nearly $39 million so far this year.

“That blown up number is because interest rates have gone up so much,” Hardy said. “And we have, of course, substantial money at the Bureau of Treasury Investments.”

Hardy said a 113 percent increase in severance tax revenue came largely from natural gas, not coal.

“Seventy percent of our severance tax revenue now is from natural gas,” Hardy said. “That’s the number that we are watching the most carefully.”

State economists say natural gas severance tax gains will likely decrease this year. John Deskins, director of the Bureau of Business & Economic Research at the WVU Chambers College of Business and Economics said at a media legislative lookahead last week that higher natural gas prices boost both corporate and personal income tax collections through royalty income.

“Reductions in gas prices would likely reduce coal prices as well,” Deskins said. “A consideration of all three of these factors would further reduce the state’s estimated surplus.”

Gov. Jim Justice said he will present a mostly flat budget for fiscal 2023. He said he understands that the Senate will continue on a budget path to cut business and inventory taxes.

“I really don’t see how you do that. We know exactly what their plan is. We’re continuing to talk back and forth to come up with a plan that will result in a good result,” Justice said. “I hope and pray that the intent from the Senate side is that what we end up trying to do is the greatest thing we can possibly do for the people of our state.”

Senate Finance Committee Chair Eric Tarr, R-Putnam, has said the Senate will challenge the Justice budget, especially on tax reform. Tarr and Senate President Craig Blair, R- Berkeley, have said the Senate’s relationship with Justice is not solid at all.

“Number one is the governor doesn’t reach out to us,” Blair said. “If you remember back when we were dealing with constitutional amendments, the governor said that the Senate was corrupt, and we were the swamp and specifically that I was corrupt and Eric Tarr was corrupt. So I guess they believe that.”

The governor’s budget gets received as a bill, and that’s the base that legislative committees work from to make their own revisions. There is one single budget bill introduced in each chamber to avoid confusion. It’s the House’s turn to take the lead on the budget this year, which means it will be their bill (whatever the final version looks like) sent down at the end.

Justice is required to present his proposed budget to the legislature on the first day of the 60-day regular session. That’s Wednesday, Jan. 11.