West Virginia Public Broadcasting
Telling West Virginia's Story
On this West Virginia Morning, we hear what lawmakers are doing to address the lack of a state budget during a special session that started Monday morning.
We also hear about a road project in southern West Virginia that some residents there hope will bring economic opportunity.
Governor Jim Justice has not included a budget bill on his call for a special session set to begin Thursday.Justice’s office released the call that…
Governor Jim Justice has not included a budget bill on his call for a special session set to begin Thursday.
Justice’s office released the call that includes five bills Wednesday afternoon.
On it are bills to raise Division of Motor Vehicles fees and the gasoline tax, as well as a bill to extend the tolls on the state turnpike.
The special session agenda will include a bill to increase teacher salaries, and of course a bill authorizing lawmakers to pay for the session itself.
The most complex of the five bills is one to restructure the state’s personal income, consumer sales, and severance taxes. That bill will likely look like one approved in the state Senate earlier this year, decreasing the number of income tax brackets while setting benchmarks to phase out the tax altogether.
According to the proclamation calling lawmakers back into session, the bill also includes measures to increase the sales tax and impose graduated coal and natural gas severance tax rates.
But the special session call itself does not include a budget bill, the only bill lawmakers are required to pass by the end of the fiscal year on June 30. Without it, the state faces a potential government shutdown.
Justice can amend the call at any point during the special session, though, meaning he could add a budget bill once revenue measures are approved by lawmakers.
Governor Jim Justice’s State of the State address brought a mixed bag of reactions Wednesday night. And from the majority party, it wasn’t exactly a happy one.
A lot of things were different in Governor Justice’s State of the State address Wednesday. It could be said his speech was unique compared to past governors. For one, he gave his speech out on the floor instead of at the House Clerk’s desk. Two, he used a whiteboard to break down some of the proposals in his speech and even had some volunteers walk in to demonstrate a part of the presentation.
His speech was colorful, and he used stories and descriptions to get his points across. However, it was his proposal on ways to balance the state budget that had many in the majority party concerned.
Justice proposed almost $30 million in cuts, but also proposed a number of tax increases – a gasoline tax, a DMV tax, an increase in the sales tax – that House and Senate leadership say they will not support as presented.
House Speaker Tim Armstead says Justice made promises on the campaign trail that he’s breaking in his budget proposal.
“You know, the governor campaigned on the fact that the people of West Virginia were overtaxed and that we needed to reduce the size of government,” Armstead said, “and yet, here we have a budget that’s been submitted that has roughly $28 million in cuts, which is much less than we were even talking about last summer, and significant tax increases that I think are going to have a really hard time getting through this process in the House and I believe in the Senate.”
House Minority Leader Tim Miley, however, says he was pleased with what he heard from Justice.
“We have a governor who said he was going to bring bold ideas, and that’s what we heard this evening,” Miley noted, “I mean, we heard a governor talk about options we have. We can either continue digging the hole deeper and cutting and cutting and cutting and not moving forward at all, or we can decide to take some bold steps and try to raise revenue and create thousands of jobs.”
While Miley says he likes what he heard, he also says he would want to look more thoroughly at the numbers before saying he’d definitely support the proposals.
Like Armstead, Senate President Mitch Carmichael also says he’s disappointed with the tax increases, saying he didn’t see much promise in Justice’s budget proposals.
“I would not characterize them as bold ideas,” Carmichael said, “This is a tired, worn out, old hat strategy of; it resembles governments of the past in which, rather than overhauling and energizing this state government, you simply raise taxes on the poorest people in America.”
Even though both House and Senate leadership had some major issues with Justice’s proposals regarding the budget, they were happy with other areas, such as the regulatory reforms and the public education overhaul.
In a conference call with the press on Friday, Department of Revenue Cabinet Secretary Dave Hardy said West Virginia revenue collections for the month of January came in about $18M short of state estimates.
In other words, he said the state essentially took about an 8 percent pay cut.
“Most of it is caused by the drop in energy prices. But we also had a downturn in some of our other industries,” he explained.
The consumer sales tax was the largest source of the drop in revenue, followed by the personal income tax.
7 out of 12 months into the fiscal year, the state is $116 million short of revenue estimates. But Hardy predicts that will grow to as much as $123 million before the end of the fiscal year in July.
Hardy says will lawmakers return to Charleston for their annual legislative session next week, they’ll have to quickly find money to fill this year’s budget gap before they can move on to balancing the 2018 budget.
That budget could have a revenue gap as large as $600 million.
In 2013, Governor Tomblin chose to expand the state’s Medicaid program, providing healthcare coverage for 150,000 more West Virginians. Up until this point, Medicaid expansion has had no impact on the state’s budget.
That’s because from 2013-2016, the federal government paid for 100 percent of the additional people covered by Medicaid due to the expansion. For West Virginia, that federal funding totaled 700 million dollars.
But next year, the Medicaid expansion agreement between states and the federal government will begin to change.
“Starting in January of 2017, West Virginia will have to pay a 5 percent match for Medicaid Expansion. In the governor’s budget that’s 14 million extra dollars for next year,” said Renate Pore, director of health policy for West Virginians for Affordable Healthcare.
In 2018, the state will have to match 6 percent, then 7 the following year, until by 2020 the match will cap at 10 percent and approximately 50 million additional dollars out of the state budget to pay for Medicaid.
“Although over time the federal match goes down, if you really look at the implications on the health and wellbeing of the people in the state it’s actually a positive impact,” said Department of Health and Human Resources Secretary Karen Bowling.
Bowling said choosing to expand the state’s Medicaid program was hugely beneficial for both the people of West Virginia and the state’s hospitals. With more people covered by insurance, fewer were going to the emergency room and leaving hospitals on the hook for a bill they couldn’t pay, leading to lower overall healthcare costs in the state.
But advocates like Pore they are worried about how the state will continue funding Medicaid.
“We are concerned about where is the money going to come from for the state match…so yeah it puts a strain on the state budget and I guess you could say it is contributing to the deficit,” she said.
Pore said she thinks both the Medicaid program and the expansion are essential programs for West Virginia.
“But I’m not unrealistic. It is expensive for the state,” Pore said. “And even though we have a great federal match, it’s still a huge cost for West Virginia. The cost to West Virginia next year will be almost a billion – 1 billion – dollars and every year that goes up. So as an advocate my concern is to create some stable source of funding.”
Or Medicaid patients – expansion or not – may soon not have access to care.
Appalachia Health News is a project of West Virginia Public Broadcasting, with support from the Benedum Foundation.
A new report released by the West Virginia Center on Budget & Policy shows the state’s cuts to Higher Education are among the worst in the country.
The report shows that funding for Higher Education in West Virginia has been cut considerably since the 2007-2008 school year.
Since then, the average tuition price of attending four-year public colleges in the state has risen by $2,135, or roughly 42 percent. The report says this is significantly faster than the growth in median income.
The report also found for the average student, federal and state aid has not kept pace with the rising costs.
The legislature has returned to Charleston this week to discuss ways to fill a $270 million budget gap for 2017. It’s unclear how much Higher Education may be cut again.
