Special Session Story Archives - Page 10 of 11 - West Virginia Public Broadcasting

Sales Tax Hike Gaining Traction in W.Va. Senate

After calls from members of the Democratic Party, Senate leaders have decided to move forward with a tax increase that could potentially solve many budgetary problems for the 2017 fiscal year and rein in the even larger problems looming in the 2018 budget year.

Tuesday, members of the chamber’s Finance Committee began discussing a bill introduced listed on Gov. Tomblin’s special session call that has yet to be taken up– an increase to the state’s consumer sales tax.

The bill as introduced allowed for an up to one percent increase in the state’s 6 percent sales tax.

The Senate Finance Committee;s amended version, which will be taken up a second time Wednesday, would sunset the tax hike in three years, rolling back the 1 percent increase on July 1, 2019.

Until then, however, the bill would bring in $196 million during the 2017 budget year and $214 million each year after.

“I don’t think that we would have had as much interest in this initially as we do now,” Senate Finance Chair Mike Hall said after a Tuesday afternoon meeting.

“We’d had conversations with people about whether or not they’d warm up to the idea and I think given the crisis, as it looms, part of the process of legislation is people become more aware of the circumstance.”

Other attempts at increasing taxes this special session have failed, though, including a proposal to increase the state’s tax on various tobacco products. The bill died in the House of Delegates last week.

Hall admitted getting the tax increase to pass both chambers will be a heavy lift.

“I just thought it was time to begin this conversation and see how far we get with it.”

Democrats, like Senate Minority Leader Jeff Kessler, have pushed Senate leaders to come up with a more comprehensive solution to the state’s budget problem. This bill would help close the state’s budget gap in 2017, leaving about a $70 million deficit, and bring the 2018 gap down from more than $380 million to around $160 million.

Senate leaders intend to put an amended version of the Senate budget to a vote by Thursday, sending it over to the House of Delegates and inevitably into a conference committee, where members of both chambers will negotiate the final version.

Hall said Tuesday that version of the Senate’s budget will not include the increase to the state’s sales tax, but will instead rely on nearly $200 million in Rainy Day funds to find a balance.

If both chambers approve the sales tax increase, though, Hall said the conference committee can consider the 196 million in new revenues for the 2017 budget year.

That new revenue, according to the Senate Finance Chair, would keep lawmakers from raiding the Rainy Day Fund and from having to implement most major cuts to state agencies.

W.Va. House Kills Tobacco Tax Hike

The West Virginia House of Delegates voted 44-55 Thursday to kill a bill that would have increased a tax on tobacco products. The bill was designed to help fill a $270 million budget gap for the upcoming fiscal year.

Senate Bill 1005, as amended in the House, would have increased the state’s cigarette tax by 45 cents, making it a full $1 per pack.

Of that hike, the first $1 million would have gone toward the state’s tobacco cessation program, the next $43.5 million would have been dedicated to PEIA, the state public employee health insurance program, and the remaining balance would have gone to the general revenue budget.

The bill would have also increased the tax on all other tobacco products, including smokeless tobacco and cigars. It was amended in the House to remove a new tax to be placed on e-cigarette liquids, which was in the bill as approved in the Senate.

Several Republican members of the House spoke of the health impacts the bill would bring, such as deterring pregnant mothers and teens from smoking. Others cited potential cuts to state programs if revenues aren’t increased.

“This bill has been dealt to us. One of six whole bills dealt to us. That’s what we have to work with–six bills,” said Del Tom Fast.

“I may hate the thought of increasing taxes but I can’t stand the idea of cutting worthwhile programs like PEIA and the PROMISE Scholarship.”

Many Democrats argued 45 cents is not enough to deter people from beginning or continuing to smoke, including Del. Don Perdue.

“I believe 45 cent tax must die for larger tax to live. I also submit that if we pass 45 cent tax, it will be another decade before you see another tobacco tax increase,” said Perdue. “[The tobacco lobby] will own us for another ten years.”

While many Republicans opposed the bill and stood by a pledge of no new tax increases, others cited the need for revenue in the budget.

“This bill is a critical component to balancing our fiscal year ‘17 budget that passed out of the House Finance Committee yesterday,” said House Finance Chair Eric Nelson, who closed discussion of the bill following three hours of debate.

“This bill is the art of compromise and balance.”

In total, Senate Bill 1005 would have resulted in $76 million of additional revenue for the state.

Both current Senate and House versions of the budget — under consideration in their respective chambers — presumed that the tobacco tax hike would pass.

With the budget still looming, Governor Tomblin expressed disappointment with the failing of the bill, stating that tax revenues were critical to achieving a balanced budget.

“You can’t build a structurally balanced budget on one-time money. Both the cuts they have identified to take out of the existing appropriations out there as well as the Rainy Day Fund,” said Tomblin.

“That’s one time money. Once they’re gone, they’re gone. It’s kicking the can down the road.”

In the initial call for the special session, Governor Tomblin had also proposed new taxes on telecommunication devices such as landlines and cell phones, as well as a sales tax increase of up to 1 percent. Neither measure has yet to move at all.

Are Furloughs Better than Layoffs for State Workers?

What happens if lawmakers do not approve a budget by the June 30 deadline? That’s a question no one at the statehouse seems to have a clear answer to just yet. Governor Tomblin and his staff, though, are taking steps to prepare for the worst-case scenario — a government shutdown.

“Should we not have a budget then June 30, every state employee would lose their job,” Tomblin said.

Theoretically, Tomblin said that’s what the result of not having a budget could mean by the end of the fiscal year. That’s why the governor is asking lawmakers to approve Senate Bill 1006, a bill that would give him the authority to furlough state employees, or schedule them for mandatory days off without pay.

“What this would do is allow the governor in a case where there is no budget, no funding mechanism, or if there’s not enough money to make it through the year, to be able to furlough employees,” he said. “That may be a day, a month a day a week, whatever the need may be to balance it out.”

The bill is currently before the Senate Judiciary Committee where several members have concerns over its provisions, like Democratic Sen. Mike Romano of Harrison County.

Romano said he can’t support the bill in its current form because it prohibits furloughed employees from being eligible for income assistance programs like unemployment or low-wage benefits.

“We have to make sure that our employees can put food on the table,” Romano said.

Sen. Mike Romano, D-Harrison County, on the Senate floor during the 2016 special session.

“We are not here to save money off the backs of people that are making $30-40,000 a year and that’s what that bill does. What we need to make sure of, is that if we have to furlough employees that they are eligible for unemployment benefits so that their families can be fed and they don’t miss mortgage payments and their cars don’t get repossessed and their kids can go to school. That’s got to be our top priority.”

But Senate Judiciary Chair Charles Trump, a Republican from Morgan County, said amending the bill to allow employees to apply for those benefits might defeat its purpose, saving the state money.

Romano suggested laying employees off rather than furloughing them might be a better option, but Joe Thomas, assistant director of the West Virginia Division of Personnel, explained to the Senate Judiciary Committee layoffs can actually be more expensive for the state and lead to the loss of several benefits for employees.

State workers who are laid off are entitled to unemployment benefits, but they also receive a cash payout for back pay and built up vacation time, according to Thomas. Laid off employees who are not rehired within 30 days also risk losing their health insurance, seniority, and built up sick leave.

“I would be coming back as a brand new employee,” Thomas said of laid off state workers who return to their jobs.

“I believe the bill, if used effectively, could result in an employee missing one day per week, one day per month of work and not completely losing their job. If that was true, I believe that would be more effective from the employee’s perspective because they would get to continue their benefits, their insurance, they wouldn’t have a break in service,” he told the committee.

Because state workers are entitled to those benefits when they are fired, Chairman Trump said relying on layoffs will likely be more expensive for the state in the short term.

That notion played out following the 2015 legislative session when lawmakers approved a bill that would have transferred Cedar Lakes Conference Center in Jackson County to a non-profit entity.

Senate Judiciary Chair Sen. Charles Trump on the Senate floor during the 2016 special session.

Tomblin vetoed that bill saying in his veto message paying out employees of the conference center for their separation costs would have been too cumbersome for state taxpayers. It was better for the state to continue to pay to operate the conference center at a slight loss than to lay off its workers.

Trump said he and his staff are looking for potential fixes to the bill to make it more palatable for all members, but said the majority party does recognize that without a budget by June 30, there will be many more problems facing the state.

“I think that based on that language in the Constitution, if we enter a new fiscal year with no budget, there’s no authority for anybody in state government to write a check to anybody,” Trump said. “So, we have to have a budget.”

“Literally, I think unless we have a budget there is no authority for anybody to get a check from the state.”

Senate Bill 1006 also includes a provision that would allow the governor, in cases where there is no budget, to use revenues coming in to the state to make debt payments on bonds.

Some members of the committee worried the provision is unconstitutional, and Trump said they will continue to look at that provision as well.

West Virginia Lawmakers Resume Work on Long-Delayed Budget

West Virginia lawmakers have returned to negotiate a long-delayed 2017 budget hampered by the coal industry’s downfall and low natural gas prices.

The Republican-led Legislature reconvened Monday, per Democratic Gov. Earl Ray Tomblin’s call.

Tomblin has proposed options of tax increases on sales, tobacco, e-cigarettes and cellphone and landline use.

Tomblin suggested using $29 million from the Rainy Day Fund and millions from other funds to backfill the 2016 budget. He requested authority to furlough state employees in fiscal emergencies.

The 2017 fiscal year starts July 1. A $270 million budget gap remains.

The Senate previously passed tobacco and sales tax hikes. The House didn’t. The cellphone and landline tax went unconsidered.

The sales tax increase could be at most 1 percent.

House Speaker Tim Armstead says it’s disappointing Tomblin placed the burden on taxpayers.

House GOP: One More Day of Special Session

Lawmakers will spend one more day in a special session in part because of Republican members of the House.

Delegates returned for morning floor session Tuesday, passed all six bills forward from second to third reading and adjourned for the day, a move that was a little unexpected by both chamber leaders.

On Monday, Senate President Jeff Kessler said he expected the session to be completed by Tuesday, but House Speaker Tim Miley said after the floor session, the House didn’t have the votes to suspend legislative rules that require bills to be read on three separate days.

“The Minority Leader had a caucus just prior to the floor session and polled their members and they did not have the votes to suspend the rules,” Miley said.

The Speaker added having an additional day of interim meetings left in Charleston also contributed to their decision.

Governor Tomblin also amended the special session call Tuesday by adding one more bill for lawmakers to consider.

That bill would extend the length of time the City of Richwood can meet as a levying body. The city plans to put a general levy on their fall ballot to help supplement municipal costs.

Lawmakers Take More Time to Complete Special Session Work

Lawmakers will return for a second day in an extraordinary session after some called for more time to consider last minute legislation.

Senators considered and passed two bills Monday, one appropriating excess lottery funds to several state programs and a second modifying the funding mechanism for the state Courtesy Patrol, but stopped short of passing the four additional bills on the call.

Senate President Jeff Kessler attributed that to uncertainty from Republicans members of the House.

“We ran our bills, got them out of the way, through the committee process today, they came out clean and so we decided to run them,” Kessler said after the Senate’s evening floor session.

“I spoke to the Speaker and I think they have an agreement with the House Republicans over there to suspend the rules tomorrow after they’ve had a night to review the bills and sleep on them.”

House Minority Leader Tim Armstead said members of his caucus received draft versions of the proposed bills on Sunday and needed clarification on some of the language.

“We had a caucus this morning and there were some questions that needed to be addressed on those and so they were referred to the committees,” he said.

Armstead said sending them to committee allowed members to discuss the legislation more completely with staff counsel.

Lawmakers will go back into session Tuesday morning to further consider the six proposed bills.

Kessler expects to pass the bills fairly quickly, allowing legislators to return to their normal interim meeting schedules.