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House Votes to End Greyhound Breeding Fund

The House of Delegates has passed a bill that would effectively put an end to greyhound racing in the state, according to its opponents. Senate Bill 437 discontinues the Greyhound Breeding and Development Fund, putting about $14 million back into excess lottery revenue accounts for lawmakers to appropriate in the upcoming fiscal year. The bill was approved last week in the Senate on a 19 to 15 vote.

The fund was created by the state Legislature in 1994 and helps support greyhound racing at the state’s two racetrack casinos in Wheeling and Nitro. It’s made up of a small percentage of the money bet at table and video lottery games at those locations and helps pay breeders as well as the winnings on races.

Greyhound officials have said eliminating the fund would cut 1700 jobs in the industry.

Several delegates – mostly Democrats – spoke against the bill during a Saturday floor session, like Joe Canestraro, of Marshall County.

“All this body has done has voted to cut low hanging fruit,” Canestraro said, “Low hanging fruit under the illusion that we’re right sizing government. No, what we’re doing is we’re taking jobs and revenue from each of our districts is what we’ve done.”

Delegate Erikka Storch, of Ohio County, was the only Republican member of the body to speak in opposition to the bill. She says the entire state reaps the benefits of greyhound racing.

“All of your districts get money from the racing casinos and the Greenbrier,” Storch said, “I would imagine if you speak to your mayors and commissioners, they will tell you about their uses for this money. Based on a study in Iowa, a year after they eliminated greyhound racing, their figures dropped 20 percent. Every district in the state will feel this.”

Delegate Shawn Fluharty, a Democrat from Ohio County, pointed out the secondary jobs that cutting the greyhound fund could impact.

Del. Eric Nelson, R-Kanawha, House Finance Chair.

“Sarah’s Kennel’s in Wheeling; they spend $5,000 a week on food and vitamins for the greyhounds,” Fluharty noted, “Now, where do they purchase that? Tristate Kennel Supply in Brooke County. They purchase vehicles; a typical kennel truck costs $60,000. Sarah’s Kennel’s owns ten of them. Where do they purchase them? Robinson Chevrolet in Wheeling, and then driving those kennel trucks, who drives them? Employees. Up and down Route 2. How much do they pay a week in just fuel? They average around $300 a week in just fuel. How many small businesses will be impacted?”

Only four delegates spoke in support of the bill, including House Finance Chair Eric Nelson who says the industry is dying in the state and it’s time for lawmakers to make tough budgetary decisions.

“At the end of the day, we’ve got to have; we ask the question of priority, and this happens to be a priority where we use a certain amount of state dollars to support a purse fund,” Nelson explained, “so the priority is, do we use this amount of money to support purses? Or do we look at our higher education and have an effect on that? Do we look at some of our health programs? The alternatives are some serious cuts to other areas that will also have serious effects on many, many citizens of West Virginia. Mr. Speaker, there’s no easy decisions with this budget.”

Senate Bill 437 passed 56 to 44 and now heads back to the Senate before moving on to Governor Jim Justice for a signature.

House Moves Forward with Elimination of Greyhound Fund

A bill to eliminate the West Virginia Greyhound Breeding Development Fund is making its way through the House. It’s been on second reading, or the amendment stage, since Tuesday, but due to a laundry list of amendments and some heated debate, consideration was postponed until Thursday.

Senate Bill 437 eliminates the Greyhound Breeding and Development Fund, putting some $14 million back into the state’s Excess Lottery Revenue Fund to be used for appropriations by the legislature. The fund is made up of a percentage of the money from table games at the state’s two greyhound racetrack casinos in Wheeling and Nitro. The appropriations help pay for dog breeding as well as bet winnings.

The House considered one amendment to the bill Thursday, which came from Delegate Jeff Eldridge, a Democrat from Lincoln County. Rather than getting rid of the fund altogether, his amendment would instead look to another funding source to help support the state’s budget crisis – horse racing.

His amendment would take half of the money from the greyhound breeding fund and the other half from a similar fund set up for the horse racing industry. Eldridge says by doing this, it’ll keep the greyhound industry alive in the state and save some of his constituents’ jobs.

“There’s some discrepancy a’how many jobs this is, well if it’s one job in my district, I’m gonna stand up and fight for it,” Eldridge said, “and if I could offer 50 more bad amendments to this thing, I would. Everybody gets up here and stands for their district and what they stand for. If we can’t band together as a group of people to fight for your district, then we’re here for the wrong reasons.”

Officials from the greyhound racing industry estimate eliminating the fund would cost nearly 1,700 jobs in West Virginia.

House Finance Chair Delegate Eric Nelson says he understands Eldridge’s concerns, but he says the industry is dwindling and the state needs the money. He spoke against the amendment.

“Twenty years ago, the racing industry for our greyhounds, and really thoroughbreds, was thriving much greater than it is now, but over these last few years especially, there’s been a tremendous decline,” Nelson said, “and I think I stated the other day that just in Wheeling alone, how the participation at the track, as far as people attending, has gone from 900,000 twenty years ago down to less than 20 last year, or maybe it was 2013 according to study. I mean it’s very difficult times, and it’s the prioritization.”

The amendment failed on a roll call vote of 39 to 57. Senate Bill 437 will be on third reading and up for a final vote in the chamber tomorrow.

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.

House Reveals 2018 Budget Plan

Delegates in the House Finance committee met Saturday afternoon to hear yet another budget proposal from Republican leadership. Earlier this month, House and Senate leaders released their budget framework, but not a budget bill.

Saturday’s presentation is not the final budget bill for the House either, but an overview of where the Finance Committee will recommend cutting government and increasing spending.

While Delegates did not see a budget bill Saturday, they were given a presentation with a general overview of the House’s budget plan. That plan is based on the governor’s general revenue estimate, which predicts the state will bring in just over $4 billion next fiscal year.

The House’s budget plan released Saturday spends $4.2 billion. It makes $45 million in cuts to government programs, fully funds Medicaid, and provides teachers with a 2 percent pay raise by refinancing the Teacher’s Retirement Debt. That refinancing frees up about $70 million in general revenue dollars each year for spending, but would cost the state an additional billion dollars to pay off the debt in the long term.

The House 2018 budget also relies on some tax increases to find a balance – largely found in House Bill 2933. The bill has been called a tax reform measure by Republican leaders. It would instate a sales tax on cell phones, daycare services, and some personal and professional services by October 1 of this year. It would also reinstate a 3 percent grocery tax by that time.

On Jan. 1 of next year, even more services would get roped into the tax under the bill, like gym memberships and music instruction. Then in July 2018, the sales tax would be lowered from the current 6 percent to 5 percent. In 2018, the bill brings in an additional $172 million from the newly taxable services and food tax, $29 million in 2019 when the rate lowers to 5 percent, and just $11 million extra in 2020 when fully implemented.

The bill will be on second reading in the House Monday, but over the weekend, several Democrats and members of the Republican Liberty Caucus attempted to kill the bill in a procedural move that ultimately failed. The attempt left some question about whether or not leadership can rely on the new tax revenue brought in by the bill.

“There are members on both sides of the aisle that will not like this final budget,” said House Finance Chair Del. Eric Nelson, R-Kanawha, “but when times are tough, everybody has to take a little bit.”

Nelson says Saturday’s procedural move was quote, “politics,” and he hopes his fellow members jump on board and support the plan leadership is putting forward.

“What we have in front of us right now are various tools,” Nelson noted, “cause we had; it’s required to have all these bills out of committee, and so all our tools are on the table right now, and so should that go down, well then that will slow up the budget process, because all of a sudden, what is built into that as it relates to expenditures across agency lines; there could be some serious negative effects to that.”

House Finance Vice-Chair Del. Eric Householder, R-Berkeley (left) speaking with House Finance Chair Del. Eric Nelson, R-Kanawha (right) in committee.

Minority House Finance Chair Del. Brent Boggs, D-Braxton, says he’s very concerned about the Sales and Use Tax bill, because he thinks it will end up hurting low and middle income people.

Not only does it increase the number of items and services that are subject to the sales tax, it would also implement a 5.1 percent across the board personal income tax, resulting for a tax hike for people who make less than $84,000 per year and a tax break for those above that income level, according to some estimates.

“They have put the burden in some cases on the people who may be the least able to pay and giving a substantial break for those that certainly have the ability to pay, and in addition to that, the base broadening bill takes in so many different areas of concern to many people. I think we need to flesh that out a little bit further and find out how that’s going to impact the bottom line of low income and middle class folks.”

Boggs also says he was disappointed members in his committee didn’t see a full budget bill on Saturday, but instead an expansion on a framework.

Minority House Finance Chair Del. Brent Boggs, D-Braxton.

“When you get a generic overview of the budget, it doesn’t tell you the small details,” Boggs said, “and for a lot of programs, for a lot of agencies, for a lot of boards and commissions, and people that depend on a lot of services, those details mean the difference between us meeting their needs and not being able too.”

The House’s budget plan also eliminates the Department of Education & the Arts — reorganizing its agencies under other departments.

The Educational Broadcasting Authority, which is West Virginia Public Broadcasting, would be moved to the Department of Education as an independent agency and receive a $1 million cut, nearly a quarter of its state funding.

House leadership hopes to present a budget bill to the committee early this week.

House Moves to End the Racetrack Modernization Fund

As lawmakers try to find ways to deal with the state’s financial problems, the House Finance Committee discussed a bill that could put $9 million back in the budget. The bill originating in the House’s Finance Committee would end the Racetrack Modernization Fund.

The fund was created in 2011 to supplement the cost of upgrading video lottery terminals – or digital slot machines and other lottery games. There are four racetrack casinos in the state – Mardi Gras in Cross Lanes, Mountaineer in Chester, Wheeling Island in Wheeling, and Hollywood in Charles Town.

Three of those casinos are in border areas and bring in out-of-state gamblers who contribute to West Virginia’s overall income. But in the mid-2000s, surrounding states began building casinos of their own. The fund was seen as a way to keep West Virginia’s gaming facilities more competitive.

Each year, lawmakers set aside $9 million in the Racetrack Modernization Fund for the upgrades, and any unused money rolls over from year-to-year. Currently, there’s $7.5 million leftover from last year. But the fund itself is only supposed to last until 2020. The House Finance Committee’s bill would end the fund three years early and re-appropriate the money to general revenue.

Some delegates in the Northern and Eastern Panhandles, however, had concerns about ending the fund, including Democratic Delegate Jason Barrett, of Berkeley County, who questioned Louis Southworth, an attorney representing the West Virginia Racing Association

“What kind of decrease in revenue have these casinos seen with this increased competition?” Barrett asked.

“I believe that in some of the years the racetracks were contributing around $450 million to the state,” Southworth said, “Last year, it was $367 million, so there’s been a decline, but at least the tracks feel that the fund has helped them keep that level up, and it would’ve been a lot worse if they hadn’t had it.”

“Would you agree that a lot of the players at these casinos are from out of state and having up-to-date games on these slot machines are critical to bringing those people in?” Barrett asked.

“No question,” Southworth answered, “It’s probably 80 to 90 percent from out-of-state, and the competition is fierce.”

Republican Delegate Erikka Storch, of Ohio County, also opposed the bill. She says the casino in her area is a huge contributor to her community, and losing the fund could make them less viable.

“If the racetrack doesn’t have the ability of that capital to upgrade their machines, will they have to lay off people? Will they have to, you know, direct their resources in other ways to maintain a competitive advantage? Will they be able to be a good player in the community as they have been? You know, they support a lot of nonprofits, they host a lot of things, they’re a major donor to a lot of things; they give back to the community a lot,” Storch explained, “Will they be able to do that? Or will they have to redirect those funds toward their capital necessities?”

Storch says she and some of her colleagues may consider offering an amendment on the floor.

House Finance Chair Eric Nelson, of Kanawha County, says he’s sympathetic to his colleagues’ concerns, but points out it’s additional revenue that can help balance the state’s budget deficit.

“I’ve got a casino, or gaming facility right in my backyard; fully aware of that,” Nelson said, “It is one of the balancing acts, you know. The priority of giving certain people or industries tax credits versus balancing the budget and doing other things like cuts and other revenue measures.”

The House Finance Committee did vote to move the bill to the full House, but on a close roll call vote of 14 to 11.

House Considers 3 Education Flexibility Bills

At the start of this legislative session, Republican leaders warned that public education could be on the chopping block, seeing reductions that the system has historically been protected from. During a recent press conference, both House Speaker Tim Armstead and Senate President Mitch Carmichael said they’ll work to mitigate the harm to classrooms and teachers, but funding will be reduced. The House’s Education Chairman says with those funding reductions, lawmakers are working to give county school systems more flexibility in how they spend their limited dollars.

House Bill 2569:

The House Education Committee is specifically looking for ways to give county school systems more flexibility when it comes to personnel. One way is through House Bill 2569.

When county Boards of Education need to reduce the number of teachers they have on the payroll, they are currently required to use a lottery system to determine which teachers of equal seniority will be let go. The bill removes the requirement and instead requires county boards to look at a variety of factors – qualifications, critical need, or the National Board of Certified Teachers.

“A school district that may have finally filled an AP calculus class or an advanced chemistry class with an educator may be forced to terminate that employee through a reduction in force with no consideration given to the fact that some of those positions are very, very hard to fill and in some cases it may not be the most senior person,” said House Education Chairman Paul Espinosa of Jefferson County.

Espinosa pulled the bill from the committee’s afternoon meeting Wednesday and says they will take it up on a later date.

House Bill 2738:

House Bill 2738 would also give more flexibility to public schools. The bill deals with teacher transfers.

“We believe it’s prudent to allow that school district to have the flexibility within that calendar year to move that individual, if necessary,” Espinosa said, “if it really makes sense for that school district, to move them to another role where perhaps their services are more needed.”

Sponsors of the bill say it will save schools’ money as enrollment changes, and it gives a school the ability to make quicker decisions when a particular role needs to be filled.

The bill passed out of committee Wednesday and heads to the full chamber.

House Bill 2637:

Another bill looking at public education flexibility is House Bill 2637. It’s already passed out of the House Education Committee and was taken up by the chamber’s Finance Committee Wednesday. It allows retired teachers to return to the classroom when there’s critical need or shortages.

“It’s not one of our efficiency issues that we’re looking at,” said House Finance Vice-Chair Eric Householder of Berkeley County, “but keep in mind; these retired teachers will be able to come back without any effect on their current retirement, so we’re not paying extra retirement benefits or anything like that, so I think it’s a win for the taxpayers.”

What now?

Legislative leaders announced earlier this week that the state’s public schools will see funding cuts—potentially as large as 5 percent—next year. House Finance Chair Eric Nelson says he and his colleagues will be looking closely at where those cuts fall.

“As far as the details of exactly what is coming from where; that’s the process that we’re going through right now; reviewing all three areas,” Nelson said, “You know, K-12 takes up 50 percent of our 4 billion dollars budget, and we’re very concerned about the various counties and their needs.”

Lawmakers have a little over 20 more days left of this regular session to pass a balanced budget. State Revenue Officials have projected a budget deficit for the upcoming fiscal year to be as large as $497 million.