Tag: Budget Bill

West Virginia Senate Passes Personal Income Tax Reduction, Budget

In a Wednesday evening floor session that stretched for more than three hours — and became at times fiery between members of the Republican majority and Democratic minority — members of the West Virginia Senate passed a measure calling for the reduction of the personal income tax and a budget bill.

Following Gov. Jim Justice holding a summit Monday with top legislators of both parties, Sen. Eric Tarr, R-Putnam, offered an amendment Wednesday to House Bill 3300 — a marquee proposal this session that calls for a reduction in the personal income tax.

Under Tarr’s amendment, the state income tax would be reduced over the course of years and tax rebates would be offered to low-wage earners (ranging from a $250 rebate for those making $10,000 or less to a $50 rebate for those making between $30,000 and $34,999).

The initial loss of revenue under the bill, which would go into effect Jan. 1, 2022, would be $818 million in the first year.

That loss of revenue would be offset by hikes to the consumer sales tax (which would jump from 6 percent to 8 percent), cigarettes (which would go up from $1.20 to $2.20 per pack) and a tiered severance tax system for coal, oil and gas. A new sales tax on professional services would also be included.

The bill would establish a fund that would take in revenues from some of the newly created streams, including increases on cigarettes and tiered severance taxes.

After the fund — dubbed the SAFER Fund by the Senate Finance Committee — hits $100 million, $50 million would be released to spur on additional income tax cuts.

“The reason this path was chosen is because the No. 1 problem that affects this state is loss of population,” Tarr said about the latest plan to reduce the personal income tax.

Democrats argued they had little time to review Tarr’s amendment to the measure.

“It was mentioned there [were] negotiations with 134 people. Well, make it 133 — because I was sure not invited,” said Sen. Mike Caputo, D-Marion.

“I looked at my crystal ball. You’re going to have 18 votes. But I’m not sure that’s what’s right for West Virginia,” Caputo said later.

Members of the minority, including Sen. John Unger, D-Jefferson, attempted unsuccessfully to table the bill until it had a fiscal note attached, as is required under Senate rules.

“You’re not going to hide from the people of West Virginia about the fiscal impact,” said Unger, after having his challenge overruled by Senate President Craig Blair, R-Berkeley.

House Bill 3300 cleared the upper chamber on the most narrow of margins — an 18-16 vote — with Sen. Bill Hamilton, R-Upshur, Sen. Patrick Martin, R-Lewis, Eric Nelson, R-Kanawha, Sen. Rupie Phillips, R-Logan and Sen. David Stover, R-Wyoming, voting against the measure.

Programs, Agencies Largely Restored In Budget Amendments

Following the passage of House Bill 3300, lawmakers took up Senate Bill 125, the upper chamber’s version of the budget bill. The funding measure remains mostly flat compared to the current fiscal year, but includes a 1.5 percent reduction for almost all agencies and programs.

Lawmakers considered a series of amendments that would restore funding to a host of agencies and programs that had been cut in the Senate Finance Committee’s version of the budget.

A slew of amendments offered by Democrats — which sought to reinstate funding for the state broadband office, the Library Commission and other programs — were rejected.

An amendment from Tarr and Senate Judiciary Chair Charles Trump, R-Morgan, reinstated $3.78 million of funding to the Educational Broadcasting Authority — the agency that oversees West Virginia Public Broadcasting. The agency’s current allocation of $3.83 million had earlier been zeroed out by the Senate Finance Committee.

The amendment from Tarr and Trump also allocated end-of-the-year surpluses to reinstate proposed cuts to Marshall University and West Virginia University, which had previously been slashed by millions each.

The change to funding for the Educational Broadcasting Authority, Marshall and WVU was adopted on a 30-4 vote, with Sen. Mike Azinger, R-Wood, Sen. Robert Karnes, R-Randolph, Sen. Patrick Martin, R-Lewis, and Sen. Randy Smith, R-Tucker voting in opposition.

Senators also adopted on a voice vote an amendment from Sen. Robert Plymale, D-Wayne, that added $50 million to the state’s broadband enhancement fund.

After settling on a final version of Senate Bill 125, senators placed that measure into House Bill 2022 before voting 24-10, with Plymale joining the majority, to send the budget bill back to the lower chamber.

The House will now consider the current version of the budget bill and the Senate’s latest set of ideas to reduce the personal income tax. The 60-day legislative session ends Saturday, April 10, at midnight.

House Kills Bill to Increase Beer Barrel Tax & More

The West Virginia House of Delegates has killed a bill that leadership says was one of the keys to balancing the 2018 budget. The bill was presented on behalf of Governor Jim Justice and originally would have raised $450 million in new taxes but drastically changed as it worked through the committee process.

House Bill 2816 would have put about $20 million dollars back into the general revenue fund during the 2018 fiscal year. The governor’s office says the budget hole for 2018 could be as high as $497 million dollars. But House officials say that’s because the governor attempted to increase state spending in his budget plan. The House’s budget calls on closing about a $340 million dollar gap, and without House Bill 2816, the chamber’s Finance Chair says that will be more difficult to do.

The bill looked at three major things to help balance the 2018 budget. First, it would’ve eliminated the film tax credit, putting $5 million back into general revenue. Second, it would’ve ended a transfer of monies from sales taxes on automobile products to the state road fund, putting about $12 million back into general revenue. And third, it would’ve increased the beer barrel tax, which estimated to bring in almost $3 million additional dollars.

This bill was up for passage in the chamber Tuesday, but was immediately met with opposition from members on both sides of the aisle. Several Democrats and Republicans opposed the bill because of its elimination of the film tax credit. But it was the beer barrel tax increase that had delegates like Republican Pat McGeehan from Hancock County fuming.

“So I’d just like to know, are we conservatives here? I thought the Republicans controlled this chamber. Maybe not, I don’t know,” McGeehan said, “Some members in my party seem like they’d like to take us back to the 1920s and early 1930s as prohibitionists. It’s not our job to pick and choose which legal products to tax. That’s called the ‘nanny state.’ It’s called free enterprise; that’s what we’re supposed to embrace.”

The bill failed 39 to 60. House Finance Chair Delegate Eric Nelson of Kanawha County says he was extremely surprised by the vote.

“You know what, we’re just going to continue – our idea of having a budget out by [Wednesday], which we were on a path of last Saturday; it’s going to be very difficult now,” Nelson noted, “So, you either have to look at cuts, or I hate to say it, revenue measures, and I don’t think the body, if they don’t look at a potential beer consumption change, where do you think they’ll be? Difficult times right now.”

Originally, delegates were also going to vote on House Bill 2933 Tuesday. It’s another bill to increase revenues for the state.

The bill in its current form reinstates a 3 percent food tax in October 2017, and it would also get rid of a number of exemptions to the current sales tax — like cell phones and professional services.

It would lower the sales tax from 6 to 5 percent in July 2018, and it would put a flat 5.1 percent rate on the personal income tax. All in all, the bill is estimated to bring in an additional $215 million between 2018 and 2020.

Delegates pushed consideration of that bill off until Wednesday.

PEIA Board Fights Budget Bill

With less two days left in the 2016 Legislative Session, members of the Finance Board for the Public Employee’s Insurance Agency, or PEIA, have serious concerns about the changes to the state budget with regards to the agency’s funding.

The budget bill, containing a line item to take $67 million dollars from the state’s rainy day fund and other special accounts in order to fund PEIA, was debated for several hours on the House floor Friday.

During this session, the Democratic Party has criticized the majority for ignoring the need for additional funding to PEIA, while some Republican members argue the current budget does fully fund the program.

In a press conference this morning, six people spoke in direct opposition the current budget bill, saying there is no agreement between the House and Senate leadership on how to fund PEIA, an agency that provides health care coverage for more than 230,000 West Virginians.

Joshua sword is Secretary-Treasurer for West Virginia AFL-CIO and a member of PEIA Board.

“We’re facing roughly $50 million to $60 million dollars in inflation every year, as well as adding new people to the book, so we’re roughly $100 million short for the next plan year,” Sword said. “The legislature promised us that they were going to come up with a dedicated revenue stream for 2016 and beyond and here we are at days 59 and 60 and they haven’t done that.”

PEIA has seen no additional funding for the past few years, yet an increase in membership and rising prices. In previous years, the agency was able to offset benefit reductions with reserve funds, which came from what could basically be considered a savings account the agency built up with excess revenues over the years. Sword says dipping into the one-time dollars is a temporary fix, one that will leave the program even worse off next year.

“The problem that creates is that it might make it okay or doable for the plan year 2017, but when we start talking about plan year 2018, we have to make up that $67 million plus the additional rate of inflation we’re facing for the following year,” Sword said. “It puts us right back in the same place where we were when we start this discussion a few months ago, at roughly $120 million in benefit reduction for the next year.”

House Finance Chairman, Eric Nelson, defended his committee’s budget on the floor Friday, saying they had to consider all options in the extremely tight budget year.

“I will say that our budget is in very difficult time right now,” Nelson said. “Whether it be revenue measures or other expense cuts, or additional cash sweeps, all of those are on the table and need to be on the table. A 60-day session is not sufficient time for this body to be prudent.”

Other Republicans defended the measure as well, including Delegate Michael Ihle, who is also the mayor of Ravenswood.

“We’ve heard a lot about 1 in 6 or 1 in 7 West Virginians, who get PEIA,” Ihle said. “What about the other six out of seven? Many of whom have had their insurance skyrocket by a lot more than 12 percent, if they’re even lucky enough to have insurance.”

Earlier this session, a bill was killed in the House Finance Committee that would have increased the tax on a pack of cigarettes by one dollar. The Senate had approved the tax and dedicated some of the revenues to the PEIA reserve account, allowing the program to help sustain itself into the future.  Both Democrats and Republicans voted against the bill in the Committee.

W.Va. Lawmakers Approve Budget Using $23M in Rainy Day Funds

West Virginia lawmakers have cleared a budget that relies on almost $23 million in reserves. The Republican-led Legislature voted Wednesday on the…

West Virginia lawmakers have cleared a budget that relies on almost $23 million in reserves.

  The Republican-led Legislature voted Wednesday on the House-Senate budget agreement. Some votes crossed party lines.

The plan wouldn’t depend on major tax or fee increases, like the cigarette tax hike that fizzled during the 60-day legislative session.

In a difficult budget year, there aren’t major pay increases, either. A small pocket of nationally certified teachers in low performing schools would get $2,000 raises.

Democratic Gov. Earl Ray Tomblin’s budget calls for $15.5 million from reserves. Republican Sen. Mike Hall says Tomblin’s budget depends on millions more from two bills that didn’t pass.

Tomblin can veto or reduce individual budget items.

 

Senate Kills Two Budget Proposals Leaving $17 Million Gap

Two bills proposed by the governor to fill general revenue budget holes died in a Senate committee Tuesday. The failure now leaves about a $17 million gap for the Finance Committee Chairs to plug at the end of session.

Subcommittees of Senate Transportation and Infrastructure held the two bills without making a decision for almost a month.

The first, Senate Bill 329, would take about $4 million from the state Special Railroad and Intermodal Enhancement Fund and deposit them instead in the general revenue budget for Fiscal Years 2015 and 2016.

The subcommittee reported the bill back with the recommendation it do not pass and the bill died.

A second subcommittee took up Senate Bill 334 which takes about $13 million for the same two fiscal years from the State Road Fund and also puts the money into the general revenue budget.

That money comes from sales taxes levied on construction and maintenance material used specifically for highway projects.

The bill received no recommendation from the subcommittee, was defeated on a voice vote and also died.
 

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