House Passes Budget of Its Own with 15 Days to Shutdown

Wednesday, members of the House of Delegates approved their own version of a budget for the upcoming 2018 fiscal year—a budget that, much like the one approved earlier in the week in the Senate, does not include any new revenue from various tax reform measures debated between the two chambers for weeks.

Instead, the House used the increased revenue estimate sent this week by Gov. Jim Justice’s Office to members of the Senate as the base for its $4.225 billion budget.

House Finance Chair Eric Nelson said the 2018 budget is very similar to that of 2017, the current budget year, but spends “roughly $30 million less.”

Credit Perry Bennett / West Virginia Legislative Photography

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West Virginia Legislative Photography

His committee approved a $4.28 billion budget earlier in the week, but that bill was based on the increased revenue that would have resulted from a revenue bill worked in a House and Senate conference committee.

That bill increased revenues by removing exemptions from the sales tax, imposing it on things like cell phones, gym memberships, and many other services. The bill, however, was never put to a vote in the House because the three Republican members of the conference committee refused to approve it.

In order to reduce spending from the House Finance Committee’s budget to fit within the revenue parameters, Nelson said the House chose to do three things:

1. Cut the $10 million of funding the House wanted to put in a surplus account in the Public Employees Insurance Agency, or PEIA
2. Take $12 million from the Senate’s operating budget, leaving the chamber with a $6 million surplus, or about one year’s operating budget
3. Include directive language requiring $25 million in surplus money that Nelson said is likely to come in in 2018 to fund the Medicaid line item in the budget

In their budget approved earlier in the week, Senators voted to cut by some $35 million each both the Medicaid line item and higher education institutions across the state. Medicaid dollars are matched 3 to 1 by the federal government.

House leadership called those cuts devastating, making the three adjustments to avoid any cuts to the Medicaid line and restore some funding to higher education institutions. Most schools in the state would still receive a 2 percent cut in 2018 under the latest House plan, with the exception of Marshall and West Virginia Universities, where cuts would total 4.4 percent.

Before the 69- 30 vote Wednesday afternoon, several members of the chamber commented that while the bill wasn’t perfect, it was better than a government shutdown, but Pendleton County Democrat Isaac Sponagule called the special session a “total disaster,” saying the House was voting to send a bill to the governor almost identical to the budget vetoed in April.

House Speaker Tim Armstead refuted those notions, noting the bill no longer includes any money from the state’s Rainy Day Fund and restores funding in many areas that had been previously cut, like Medicaid.

After the vote, the amended bill was sent across the rotunda to the Senate where it seemed unlikely Wednesday night that members would concur with the adjustments.

Senate Majority Leader Ryan Ferns said that decision will likely be made for two reasons. The first, members of the House have not approved the two bills presented by Justice to increase funding for road maintenance and construction, which is the basis of the $130 million increase to the revenue estimate sent to the Senate Tuesday.

Credit Perry Bennett / West Virginia Legislative Photography

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West Virginia Legislative Photography

The second, Ferns said, is because the bill contains more than $50 million of what he calls one- time money, which included the $25 million in future surplus dollars that will be directed to the Medicaid funding line. That leaves the House budget structurally unbalanced, Ferns said.

Ferns said the Senate will likely take up the House message of the budget bill’s passage Thursday.

If Senators refuse to concur with the House budget, the bill will go to a conference committee.

If lawmakers do not approve a budget by Monday, June 19, the state Auditor and Treasurer’s Offices have said it will become more difficult for their offices to perform necessary functions, like paying bills or making future payroll. If a budget is not approved by June 30, state government—and all of its services—will shutdown.