Larry Rowe Story Archives - West Virginia Public Broadcasting

State Budget Revenue Healthy, Officials Unsure About Tax Cut Trigger

State revenue is solid for the year, and over estimates, but down from last year because of personal income tax reductions and severance taxes.

West Virginia tax collections are higher than estimated, but it is unclear if another personal income tax cut will happen in 2025.

Legislators heard Monday from Mark Muchow, the deputy secretary of the state Department of Revenue, about 2024 budget revenue numbers.

“After nine months, the state has collected more than $4.07 billion. That’s $522.9 million above estimate,” Muchow said. “It’s down from last year by 11.6 percent, which is pretty good considering that we cut the income tax by 21.25 percent and some reductions occurred in the severance tax as well.”

Muchow said personal income tax collections are $184.1 million above estimate for the year. He explained that it is down 9.4 percent year to date over last year.

“Again, 9.4 percent is pretty good considering that we cut the tax rates by 21.25 and the income tax as a whole was over 40 percent of general revenue fund collections,” Muchow said.

Severance taxes on coal, gas and oil were budgeted for just $22.1 million for this fiscal year to date. So far, the state has collected $48.129 million. That sounds promising, except the previous fiscal year brought in nearly $85 million at this point in 2023 and is off more than 43 percent.

Since taking office, Gov. Jim Justice has maintained relatively flat budgets and kept budget estimates low as well. That has guaranteed annual budget surpluses. Over the last few years, they have topped $1 billion each fiscal year.

Last year, when the West Virginia Legislature passed the personal income tax cut, the bill included triggers that would further reduce those taxes. The triggers are tied to budget surpluses.

Del. Larry Rowe, D-Kanawha, asked about the trigger mechanism during Monday’s meeting.

“Are you able to project whether the August trigger is going to come into play or not?” he said.

“It’s too early for us to do that type of projection. There’s a lot of revenues outstanding. I do believe that the income tax is going to trend lower over the final, at least over the April, May period, [it] may bounce back in June,” Muchow said. “But there’s too many variables out there to make a good, firm analysis on the trigger.”

“When do you think you’ll comfortably be able to make that calculation?” Rowe asked.

“We will not have a complete idea till the end of June,” Muchow said. “But we’ll have a better idea for the end of April. And even better at the end of May. So by the end of May, things will be a little bit better in focus than they are today.”

“So if we were to have a special session in May, and that has been discussed, then you may have the numbers you need to calculate whether the August trigger will come into play?” Rowe asked.

“We’ll have a better idea, but not a perfect idea,” Muchow said. “Again, there’s a number of variables outstanding that we’d have to consider in that equation.”

The Legislature is expected to return to Charleston for a special session on the budget in mid-May following the election but before the end of the month.

Federal Government Asks For $465 Million Back As Legislators Look For Fix

A surprise notification from the federal government that the state must return nearly half a billion dollars in COVID-19 funds has several major funding issues on hold.

These last days of the regular session are typically when state budget issues are debated and resolved.

A surprise notification from the federal government that the state must return nearly half a billion dollars in COVID-19 funds has several major funding issues on hold.

These last days of the regular session are typically when state budget issues are debated and resolved.

But when federal dollars were funneled into West Virginia local school districts in the early days of the pandemic, rules on how to spend that money did not come until later.

Facing crucial budget bill deliberations, the House Finance Committee Chairman, Del. Vernon Criss, R-Wood, said it was a shock when learning this week the federal government was looking at a $465 million clawback of the state’s CARES Act education spending.

“It was just amazing that the feds can do something like this to you,” Criss said. “We’re not the only state they’re doing it today. There are other states that are in the same position. I don’t know to what degree, but this is a sizable amount of money to the state of West Virginia.”

It’s not just education funding that’s in jeopardy. The budget bill passed by the Senate this week did not include Social Security tax cuts and has no mention of state employee pay raises. The House Finance Committee Minority Chairman, Del. Larry Rowe, D-Kanawha, is concerned about the effect on a number of what he calls programming possibilities.

“West Virginia State is in for a $50 million agriculture lab that they need,” Rowe said. “And this, you know, will put that kind of a project in jeopardy in a new project. So and if it moves off several years, that would be a real problem.”

Rowe says he’s concerned this could also affect senior services projects.

Officials from Gov. Jim Justice’s office say the federal expectation was the state would match the federal pandemic grants going to education.

Sen. Eric Tarr, R-Putnam, the Senate Finance chairman, says that’s easier said than done.

“West Virginia is very unique, and how we fund K-12 education relative to a lot of other states,” Tarr said. “Because we’re formulary based, so you can’t just suddenly increase the formula with some of the rules they had around the CARES dollars the way that they would need to spend.”

Now, Criss says the governor’s office is working with the feds on a waiver, showing that they are providing more state money toward education.

“Things like the school building authority that we appropriated, then we authorized the spending a couple days ago, we authorized the monies to go into the account yesterday,” Criss said. “So now is as that bill progresses, then we’ll have part of that $465 million taken care of.”

Criss said the governor’s office is also trying to communicate to the federal government how the state used that money in accordance with the state’s statutes and formulas.

“We’ve done the pay raises with the benefit package, we’ve also confirmed that we’re continuing to put in the monies into the Teachers Retirement Program in the 40-year plan as well as the current amount needed,” Criss said.

Criss, Tarr and the governor’s office all seem confident, with hopes for a quick resolution and no loss of funds. But with a week left in the regular session and no budget yet passed, Criss says the timing couldn’t be worse.

“It’s just poor timing on the Fed announcement to the governor’s office,” Criss said. “And we are here today, knowing that we have one week left, we need to get the budget process concluded on both sides so we could start putting the bills together and come up with a compromise for the first week. So everybody will have an opportunity to see what we’ve got.”

The deadline for putting the budget in isn’t until June 30. Criss said that while the deadline for the budget isn’t technically until June 30, he would have to break a promise and nearly decade tradition of having the budget done by the 60th day of session.

“We’re going to fix it. It’s a one-time thing,” Criss said. “We’ve got the funds available. And it’s just a matter of trying to figure out where they all have to go before the first of July.”

Criss said he thinks that everyone currently included in the budget will stay covered, but that it’s an evolving situation.

“You know, stay tuned,” Criss said.

A Discussion Of The State Budget And When To Stop Driving This West Virginia Morning

On this West Virginia Morning, government reporter Randy Yohe spoke with Senate Finance Chair Eric Tarr, R-Putnam, and House Finance committee member Larry Rowe, D-Kanawha, to get the latest on the state budget.

On this West Virginia Morning, government reporter Randy Yohe spoke with Senate Finance Chair Eric Tarr, R-Putnam, and House Finance committee member Larry Rowe, D-Kanawha, to get the latest on the state budget.

We also continue our series “Getting Into Their Reality: Caring For Aging Parents” as News Director Eric Douglas speaks with insurance expert Paul Moss about when older drivers should give up being behind the wheel.

Also, West Virginia lawmakers advanced a bill Monday that restricts medical care for transgender youth.

West Virginia Morning is a production of West Virginia Public Broadcasting, which is solely responsible for its content.

Support for our news bureaus comes from West Virginia University, Concord University, and Shepherd University.

Listen to West Virginia Morning weekdays at 7:43 a.m. on WVPB Radio or subscribe to the podcast and never miss an episode. #WVMorning

W.Va. Dept. of Commerce Requests More State Dollars

The West Virginia Department of Commerce gave the House and Senate Finance committees a presentation Monday morning to explore the state’s competitiveness in attracting businesses.

The Commerce department also asked for a significant increase in its funding. However, that request collided with the reality of the state’s dire budget situation.

The Joint Standing Committee on Finance met in the House Chamber for the Department of Commerce’s informational meeting. The presentation was part of Governor Jim Justice’s Save Our State plan to bring more business and jobs to West Virginia.

The presentation explored ways the state could improve its competitive standing by enhancing infrastructure, building up a stronger workforce, and identifying good site building locations. Presenters also said that so-called Right-to-Work legislation has been a positive factor in attracting some businesses to the state.

But the state’s Right-to-Work legislation has not been fully implemented in West Virginia yet. It’s been challenged in a court case, and deemed unconstitutional by a Kanawha County Judge. The case will likely be decided by the West Virginia Supreme Court.

The Department of Commerce Cabinet Secretary Woody Thrasher says that even though the state is facing a budget shortfall this year, it’s not the time to cut the Commerce Department.

“West Virginia is dead last, and the reason we’re dead last, is a variety of reasons, but relative to the Department of Commerce, it’s because we do not have the tools in our toolbox to attract business specifically, really good sites,” Thrasher said, “I think we’re doing a really good job on workforce training. I think we’ve got a great quality of life, but we are way behind everybody else when it comes to having sites ready.”

Thrasher told lawmakers the Department of Commerce would need at least $35 million in increased funding for improving the state’s business climate, attracting more industry, and for site readiness.

House Finance Vice-Chair Eric Householder, of Berkeley County, says he felt inspired by the presentation, but he says increasing the Department’s budget could be tough.

“Right now, it’s going to be extremely difficult,” Householder said, “Currently we fund Commerce roughly around $10 million a year. It’s a tough budget year, as we all know, and it’s going to be extremely difficult, but we’re gonna do what we can. You gotta keep in mind, we’re trying to get the best return on investment for taxpayers.”

Democratic Delegate Larry Rowe, of Kanawha County, is a member of the House Finance Committee. He says he feels the request from the Commerce Department is a reasonable goal to achieve.

“We’re spending $10 million, and little of that is going to programming, most is going to personnel and expenses, so what I’d like to see us do is define very clearly what that extra money would be for and where it’s going to be spent,” Rowe said.

During the presentation, Cabinet Secretary Thrasher mentioned that by the end of the summer, he and his team hope to rebrand the state by having the Department of Tourism join the Department of Commerce. He also noted how getting the state’s Community Colleges involved more heavily in training the workforce will also be key in getting more industry in the state.

Arrests vs. Treatment: Delegates Debate Drug Trafficking Bill

A bill increasing penalties for drug traffickers was largely the focus of the House floor session Friday. The bill is part of the House leadership’s plans to crack down on people selling drugs in West Virginia to curb the substance abuse epidemic.

House Bill 2648 would increase the penalties for trafficking or manufacturing a controlled substance while in the presence of a minor, making it a felony. The bill carries a penalty of a three year prison term without the ability to receive parole.

The state Division of Corrections was asked to estimate the cost of the bill, but in the fiscal note, the division said they were unable to estimate how many new offenders would be sentenced. The division did say, however, that each new offender would cost the state about $28,000 per year.

The high cost was a concern for some lawmakers, including Delegate Larry Rowe, a Democrat from Kanawha County. Rowe says it’s unlikely most of the people convicted under the bill would be major drug traffickers, but addicts who need treatment.

“Every single day we’ve been in here, except the first few, we have had a bill to raise the penalties on a crime that already exists,” Rowe noted, “We’ve just got to stop doing it, and the economic argument’s very, very wise. We are spending a fortune on corrections; we are being ruined by the amounts of money we spend on corrections as crisis response, when we ought to be spending that same amount of money on prevention.”

Delegate Kelli Sobonya, a Republican from Cabell County, is one of the sponsors of the bill. She argued protecting children in the state, no matter the cost, is what’s important.

“We can talk about the cost of incarceration, but you know, we pass legislation and penalties for two reasons, to be used as a deterrent if it’s high enough, it can be a deterrent, hopefully, you know, people won’t do that behavior, but you know, most likely addicts, they’re gonna do it anyway, because they’re addicted. They make those bad decisions, because they do have an addiction,” Sobonya said, “But you know, for instances like this, I think, you know, that parents need to be held responsible for endangering their children.”

Delegate Mike Pushkin, a Democrat from Kanawha County, opposed the bill, because he says it does nothing to assist in the treatment of addiction, which is where lawmakers should be focused if they want to curb substance abuse in the state.

“These folks aren’t thinking in the long term. They’re not thinking about the penalty, they’re thinking about what’s right in front of ‘em,” Pushkin explained, “And, while I wish this bill, this legislation, would put an end to these stories that we’re hearing; I’m afraid that it will not, and what it will do is put a lot more people who could possibly benefit from treatment; it’s gonna give them longer sentences; not allow them to parole.”

Del. John Shott, R-Mercer, House Judiciary Chair.

Several lawmakers questioned House Judiciary Chair John Shott about hypothetical situations that could come up should the bill take effect. Shott says while those situations may deserve consideration, the law allows local prosecutors some discretion.

“There’s always a hypothetical that pulls at your heartstring in these cases,” Shott noted, “There’s always a hypothetical, but those hypotheticals are based on the absolute worst case scenario. They’re based on an assumption that our prosecutors don’t deserve our trust, they’re based on the assumption that we don’t have any trust or confidence in the legal system to do the right thing, or the common sense and good judgement of our jurors to see through our situation, and do the proper result, or in our judges.”

After over an hour of debate, House Bill 2648 passed 85 to 12 and now moves onto the Senate for consideration.