House Finance Committee Story Archives - West Virginia Public Broadcasting

Senate Passes Amended House Budget, Expects Easy Approval

The Senate passed the House of Delegates’ budget bill Thursday evening.

With the Senate’s passing of House Bill 2024, the legislature is one step closer to having a budget bill, the one constitutional mandate the lawmaking body has in its annual session.

The Senate previously passed its own budget bill, Senate Bill 150, on Feb. 25.

Before passing the bill, the Senate approved a strike and insert amendment to House Bill 2024 aimed at bringing the two chambers’ budget proposals in line with each other.

One of the changes between the two bills is an increase in appropriations of more than $500 million from the general revenue fund, for a total appropriation exceeding $20.5 billion.

In response to a question from Sen. Charles Trump, R-Morgan, Senate Finance Chair Sen. Eric Tarr, R-Putnam, said he was confident this version would soon be on the governor’s desk.

“I think I’ve heard the answer to this question around the building, but this is agreed to now completely?” Trump asked. “In other words, it’s a House bill, I guess it has to go back there, but are we to understand that you’ve managed to convince them that they should accept what the Senate’s work product is?”

“That is very accurate,” Tarr replied. “I fully expect that as we pass this over. It’s gonna go right through there into the governor’s office.”

Trump concluded his statement by commending his colleagues in the Finance Committee for their work on the budget.

“We should not fail to note this is the fifth consecutive year when we will complete work on a budget within the 60-day regular session,” Trump said.

Historically, the legislature has reconvened in special session after the conclusion of the regular session to complete a budget. In 2016, the legislature narrowly approved the state’s 2017 fiscal year budget in June.

House Bill 2024 now returns to the House of Delegates for its approval.

Lawmakers Disagree Over Appropriation Of Federal Relief Funds

With the signing of the tax cut bill, lawmakers have taken a significant step towards finalizing a budget. However, there are still some coronavirus relief monies yet to be appropriated, and significant debate on how to use them.

With the signing of the tax cut bill, lawmakers have taken a significant step towards finalizing a budget. However there are still some coronavirus relief monies yet to be appropriated, and significant debate on how to use them.

House Bill 2883 would make a supplemental appropriation of $500 million from the Coronavirus State Fiscal Recovery Fund to the Economic Development Authority.

Community activists from almost a dozen organizations including the NAACP and the ACLU gathered Tuesday morning to call for a portion of those funds – about $300 million – to be invested into West Virginia’s poorest communities.

Rev. Matthew Watts of the Tuesday Morning Group has promoted an alternative application of remaining federal relief funds since before the start of the session. He wants to take the $300 million and allocate those dollars to cities, towns and counties based upon the proportion of people living below the poverty line.

He and others are now concerned that allocating the money to economic development doesn’t meet the intent or requirements for American Rescue Plan Act funds.

“It now appears that the legislature is going to seriously entertain the governor’s request that $500 million of the remaining $678 million in ARPA dollars go to the general economic development fund,” Watts said. “We think it’s just important to bring it back to the public’s attention that that was not the federal government’s intention when they sent the money. They made it clear in the guidelines that general economic development was not an allowable expense.”

Watts says the spirit and intent of the federal statute was to be invested strategically in underserved and long marginalized and disadvantaged communities. He believes that can still be done while also meeting the governor’s desire for large-scale business investment.

“It’s just a matter of them realizing it’s not a zero-sum game, it does not have to be either we give all the money to our state corporation for economic development, or we give some money to invest in the people in the places where they live,” Watts said. “They both can be done because with the $1.7 billion in budget surplus, with the remaining $677 million in opera dollars, there is an opportunity to do both.”

House Minority Leader Del. Doug Skaff, D-Kanawha, is the bill’s co-sponsor. As the minority leader, Skaff said his name being on the bill is largely ceremonial, and he has promoted several amendments to try and codify Watt’s proposal for community aid from the funding.

“A lot of us feel like we should not put that much money into that fund. Economic development is what we need and what we’ve done,” Skaff said. “We’ve done a lot over the last couple years, but we still have people in need. We have counties, hurting cities, and we have to take care of our people who are still coming back out of COVID. We have proposed amendment after amendment to take $300 million of that and put it in underserved areas around the state.”

Skaff believes, like Watts, that direct investment in communities is a viable form of economic development.

Senate Finance Chair Sen. Eric Tarr, R-Putnam, is not convinced that such a direct expenditure would be the best use of the funds.

“The way that we, the Senate, has been characterizing those revenues is an opportunity to save money going forward, or to improve the return, whether it be in jobs or whether it be in revenue that comes in state off those investments, for the operations of state going forward,” Tarr said. “So, to go out and grant it just on communities at large, without addressing those two issues – which those two issues I just mentioned, are nine times out of 10 job creating initiatives in West Virginia, which end up helping all these communities. I think it’s a difference in philosophy of how you do it: directly grant it to communities versus teaching men to fish so to speak, when we bring jobs into communities.”

As the legislative session draws to a close, Watts wants to see his proposal codified, but is hopeful the governor can still use the funds to help West Virginians.

What he doesn’t understand are the motivations of some legislators.

“I don’t know how the legislators from my part of the state, the southern West Virginia coalfields, that look like a third world country that’s just been devastated by war, I don’t know how they can go back to their cities, into the towns, to the villages and look the people in the eye and explain to them why they would not stand up and support our idea that some of that money came back to their counties,” he said. “I don’t know why they want to be here, if they’re not going to represent the people that sent them here. We will see what they do when it comes time for them to vote in these respective committees.”

House Bill 2883 was approved by the House Finance Committee later on Tuesday with the recommendation to the full House of Delegates that it do pass. Several amendments to the bill, including Skaff’s proposal for direct investment in communities, were voted down.

House Will Study Tax Reform Plan Passed By Senate

House of Delegates members said on Monday there is no rush in offering the people of West Virginia well deserved, and well thought out tax relief.

The Senate and Gov. Jim Justice now agree on the amended House Bill 2526, the estimated $750 million Senate plan that includes an initial personal income tax cut, a personal property tax credit for vehicles and a property tax break on equipment and inventory aimed at small businesses.

The 20.25 percent personal income tax cut – higher than the Senate’s initial proposal of 15 percent but lower than the House’s proposal of 30 percent – would be effective retroactively to January 1, 2023.

A provision to trigger future income tax reductions, similar to the one in the Senate’s original proposal, is included with changes. The new formula is based on a comparison of general revenue collections in a fiscal year minus severance tax collection as compared to the base year of 2019.

Adjusted for inflation, if the general revenue collections minus the severance tax collections exceed the adjusted base year, a reduction would be triggered.

The amendment also includes a refundable tax credit for personal property paid on automobiles and 100 percent refundable tax credit for disabled veterans against personal income taxes paid on homesteads, both remaining unchanged from the original Senate proposal.

Small businesses with an appraised value of $1 million or less would be given a tax credit allowing a 50 percent refund against personal and corporate net income tax for personal property.

The removal of the so-called “marriage tax penalty” was not included as part of the compromise.

The bill was received by the house on Monday.

However, House Majority Whip and Finance Committee member Marty Gearheart, R-Mercer, said there needs to be a close examination of the Senate tax proposal before any final decisions are made.

“There have been a lot of negotiations and a lot of conversation, and a bill is coming to us. There is a lot of detail in that bill. And we want to be certain to go through it to make sure it is correct and something that we can work with,” Gearheart said. “The House members overall are interested in cutting taxes for West Virginians. This is a vessel to do that and we’re going to examine it closely to make sure it’s right and proper and deal with it at that point.”

Gearhart said there are no rubber stamps, by the House of Delegates or the Senate.

Form Energy Project Funding, Bus Drivers, Adoption Tax Credits Approved By House Finance Committee

The House Finance Committee debated a wide variety of bills on Monday that were recommended for passage.

House Bill 2882 makes supplemental appropriations to the state Economic Development Fund. The highlight of the bill is subsidizing $105 million to support the Form Energy project, bringing a new age battery plant with 750 jobs to the old Weirton Steel plant site.

Some delegates and a committee member voiced concerns about the risk involved with a state ownership stake in the buildings and land.

Del. Doug Skaff, D-Kanawha, was among a committee majority supporting the state funding.

”Other states are doing this, they are spending, they are investing and I’m just blessed that we’re having an opportunity to compete now,” Skaff said. “I got a chance to meet the people from Form Energy. They are committed and did their due diligence. They looked all around the country to find the right location. We have an opportunity today to send the message that West Virginia is open for business.”

The total public support by the State of West Virginia for the project is $300 million, including this piece being advanced. Form Energy has pledged to put up at least $350 million.The bill now goes to the House floor for approval.

Also on the Finance Committee agenda,

House Bill 2346, declaring a crisis shortage of qualified bus drivers. The bill allows retired bus drivers to accept employment and keep their benefits. It passed unanimously.

House Bill 2002 relates to providing support for families. The measure raises the income tax credit for adoptive parents from $4,000 to $5,000 and establishes a pregnancy support program. This bill was also sent to the House floor.

House Bill 3036 uncaps the number of districts from three, and increases the limit on approved costs to $150 million under the BUILD WV Act. The goal is to incentivize building housing neighborhoods in communities around the state to supply lodging for West Virginia’s growing economic development projects. The bill was sent to the house floor for approval.

New House Leadership Positions Verified

Speaker of the House of Delegates, Roger Hanshaw, has made some committee leadership appointments and changes prior to the upcoming 2023 regular legislative session.

Three sources within House membership confirm that House Finance Chairman Eric Householder, R-Berkeley, will become House Majority Leader replacing Del. Amy Summers, R-Taylor.

Those sources say the majority leader position decision came down to Householder and Del. Matthew Rohrbach, R-Cabell. Rohrbach will remain as Health Committee Chair and may have two vice-chairs.

Del. Vernon Criss, R-Wood, who has been the finance committee vice-chair, moves up to the chair of the finance committee.

Sources say Hanshaw appointed Del. Marty Gearheart, R-Mercer, as majority whip, and Del. Paul Espinosa, R-Jefferson, as speaker pro tem.

We also understand that current speaker pro tem Del. Gary Howell, R-Mineral, will take over a new economic development committee.

All House members are now receiving letters in the mail informing them of their committee assignment and positions.

The legislative session runs 60 days and will begin on Jan. 11, 2023.

House Finance Hears from Chief Justice About Court Spending, Talks Options for Oversight

With the Legislature paying more attention to the West Virginia Supreme Court’s spending, conversations continue about how lawmakers might have a hand in overseeing the budget of the judicial branch.

Chief Justice Allen Loughry gave a presentation to the House Finance Committee Friday morning where he tried to explain spending that has been criticized in recent months.

The state supreme court is not required to appear before legislative committees and give a presentation on their budget, which they themselves control. However, as a courtesy, it has been standard practice for the administrator of the West Virginia Supreme Court of Appeals during budget hearings at the Legislature.

Loughry spoke to the committee and took questions about some court expenditures, including the purchase of a sofa for $32,000, among other high-dollar purchases totaling more than $3.7 million to redecorate the Supreme Court justice’s Capitol offices.

“I think that this is absolutely a legitimate concern and question. There is nobody more outraged by these purchases than me. Many people in this room have known me for more than two decades and they know that I would have never approved of such things,” Loughry said.

“However, there was clearly a failure of oversight at the court. These things happened. We can’t go back and change them. But, what we can do is go forward and make sure that something like this never happens again,” the Chief Justice added.

Loughry also placed blame for some spending practices on the court’s prior administrator, Steve Canterbury, who was fired early last year. Loughry was elected to the court in 2012, assumed office in 2013 and took on his role as Chief Justice in 2017.

Legislative auditors announced this week they plan to audit the judicial branch’s finances.

When asked Friday morning for more details about spending across the court system, Loughry was unable to provide that information. However, he did promise Democrat Del. Mick Bates he would return with a report.

“I’m going to hold him to that. Until I get that, I’m not inclined to do anything with their budget,” Bates said.

Lawmakers in both the House and Senate have offered a resolution to amend the state’s constitution to put the court’s budget under their review. If passed, that resolution would go to West Virginia voters for final approval on a ballot.

Bates said the option of a constitutional amendment should be on the table. However, he said he is more concerned about oversight and transparency and argues that should not require a measure as strong as a constitutional amendment.

“I think we can which we should consider doing that. And I do see the argument against it. But, I think it’s something that we should consider doing. But irrespective of that, we are entitled — what the citizens of West Virginia are entitled to know is, ‘Where is this money going?’ for any agency,” Bates said, adding that the constitutional amendment issue involves the fact that the Legislature can’t reduce the judicial branch’s budget.

“I’m quite happy to give them $139 million. I just want to see where it’s going. I don’t think that’s an unreasonable request by me or anybody else. It doesn’t require a constitutional amendment to do that.”

Majority Leader Daryl Cowles agrees that a constitutional amendment is one of the top options and that he personally has supported such an effort in past sessions — even before reports of spending made headlines. He also said other options to achieve budgetary oversight are necessary at this point.

“We talked about some other things short of [a constitutional amendment that would put the court’s budget in the Legislature’s control] — putting them back under purchasing, stripping from them the ability to renovate their own spaces, other things that we could do,” Cowles said.

“There was a general consensus and feeling of transparency and open government and checks and balances. That what’s coming — just to what degree and what we need to do, I think, is still under consideration and in conversation,” Cowles added.

In an attempt to draw further attention to the issue of what he called the court system’s “irresponsible spending”, Democratic Del. Mike Pushkin called Thursday for a resolution to be introduced to investigate the possibility of impeaching Chief Justice Loughry. However, Republican leaders like Cowles don’t necessarily see such an effort gaining traction.

“I recognize that it is the reflection of the frustration that we all feel — that spending abuse happened. So, I see for what it is. It’s a reflection of the frustration. But I certainly don’t think we will head down that route,” Cowles said.

The West Virginia Supreme Court of Appeals is scheduled to provide a budget update during a Senate Finance Committee hearing at 3 p.m. Tuesday, Jan. 18.