CHARLESTON, W.Va. — There are holes in the state budget, but no clear consensus at the State Capitol — with just more than two weeks left in the 2014 Regular Legislative Session — on how to plug those holes for this year and next year.

Senate President Jeff Kessler (D-Marshall, 2) said he thinks state lawmakers should raise the state cigarette tax to generate an estimated more than $90 million in the coming year, but that plan has hit a wall in the House of Delegates.

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Senate President Jeff Kessler (D-Marshall, 2)

“We’re at a point with the down swing in our economy that, if we don’t raise some revenues, then we’re going to really have to raid our Rainy Day Fund and I don’t think that’s in the best long-term interests of the state’s finances,” said Kessler on Thursday’s MetroNews “Talkline.”

The current state tax on a pack of cigarettes in West Virginia is 55 cents.  Kessler said Senate Democratic leaders have proposed taking that state tax to $1.55 a pack.

However, Kessler’s proposal was rejected outright by House of Delegates Democrats during a private caucus, according to House Speaker Tim Miley (D-Harrison).

“We were very frank in asking if there was support among the caucus members to support an increase in the cigarette tax, and there was not sufficient support for that,” Miley said.  “There was very little support for that.”

Miley said his members also rebuffed a suggestion to increase the Consumer Sales Tax by one percent to seven percent.

Miley conceded election year politics played a “significant role” in the Democrats’ decision to reject all tax increases.

“There’s always some fear by all elected officials wondering whether constituents back home will support them if they vote in favor of any tax increase,” Miley said.

He added, however, and his leadership team is working on a counter proposal to try to fill the budget gap that is similar to the Governor’s plan of trimming $39 million from various accounts that receive lottery money.

Under the House plan, 15 percent would be cut from most accounts, including the thoroughbred and greyhound breeder funds, but only 10 percent of the money directed to counties and cities would be reduced.

Even so, officials will still have to dip into the emergency Rainy Day Fund for about $200 million of the $920 million fund to balance the budgets for this year and next.

Kessler might have been able to get the tobacco tax through the senate though some members are reluctant.  Senator Bill Cole (R-Mercer, 6) said he does not know if he’ll support such an increase if it comes up for a vote in the Senate.  “It seems easy, ‘Let’s tax people that have a bad habit,’ but if we utilize that, I guess we need to go after alcohol and foods that have too much fat in them,” he said.

“I am so against raising taxes, raising fees, breaking the backs of West Virginians yet one more time.  I think we have so much housekeeping to do of our own.”  Cole said he thinks significant savings could be found within current government operations.

Lawmakers will have to come up with an estimated more than $180 million to balance the budget, a requirement of state law.

Governor Earl Ray Tomblin has proposed a balanced budget that’s based on a combination of cuts in spending and passage of six bills to sweep a number of state accounts.

Kessler said there is “no appetite” to take $13 million from the Road Fund, which pays for road construction and maintenance, as Tomblin has proposed.

The Rainy Day Fund, which is designated for emergencies, now stands at $920 million.  Up to now, it has not been used to balance the state’s budget.  The ratio of the reserve compared with the state’s general fund determines West Virginia’s bond rating.

Kessler said he would not support taking more than 20 percent from the Rainy Day Fund.  “If we don’t do the other (raise the cigarette tax), there is no choice other than to take it out of the Rainy Day Fund and I think that would be disastrous for us to raid that,” he said.

The 2014 Regular Legislative Session ends on Saturday, March 8 followed by a one week session focused on passage work.


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  • The Answer

    It has become very obvious that Jeff Kessler couldn't lead a hog up a ditch with a sharp stick..

  • WV Hillbilly

    Earl Ray Tomblin and Joe Manchin both exercised poor judgment in removing the tax from food. It was the fairest tax. The more you ate, the more you paid. And, if you could not afford it, you were buying your food with government assistance anyway. DUH!!! Run it in the ground boys!

    • susanf1218

      Agree!! . It was a dumb idea to get rid of the food tax but it was a "feel good" move designed to appeal to the masses. ;

  • ViennaGuy

    A budget shortfall does not constitute an "emergency," so the rainy day fund should not be raided to cover such shortfalls. Raiding the fund to fill in budgetary holes doesn't solve problems over the long term; it only kicks the tough-decision can down the road another year. Further, when you've raided the fund once to fill in the budgetary holes, it becomes very easy to do it again, and again, and again ... until there's nothing left to raid, and then what do you do?

    According to the governor's FY2015 budget proposal, DHHR is the single-largest consumer of state revenues, to the tune of 40.6% of the budget, or $4.9 billion. By comparison, education only consumes 21.1% of the budget, or $2.5 billion. I have no doubt that there's enough fluff in the DHHR budget that the shortfall could be resolved just with revisions to that department. DHHR is very big and very expensive.

    • Aaron

      I'm curious, does this include money allocated by the Federal Government to be spent by state agencies?

      I ask because it is my understanding that the department that spends the most West Virginia state tax revenue is Education.

    • Hillbilly

      Rainy Day fund should NOT be used to patch a budget. Budgets are LONG term recurring financial items. Rainy Day fund is for emergencies.

    • Joe


      What comprises the biggest expense of DHHR operations? Thx to you or others for the insight. I hadn't idea DHHR had such a large budget.


      • ViennaGuy

        According to the governor's budget proposal, nearly 70% of the DHHR budget is 'medical services.' I'm sure that includes Medicaid, which means a good bit of federal money is involved. Still, I have to believe that there are areas where expenses can be trimmed - if someone will just take the initiative and do it.

        I seem to recall that when Joe Manchin was governor, he wanted to trim the state motor pool. Did that ever happen? I know that I see a LOT of vehicles running around here with state plates on them, and I'm not talking about the State Police, Regional Jail Authority, or the Division of Highways ...

        For anyone who's interested, the governor's FY2015 budget proposal can be found here:

        The first link is a summary, and the second link is a detailed breakdown. The 40.6% and 21.1% numbers come from the first link(the 'Volume I Budget Report').

  • wvrefugee

    Stay Classy WV!! FAIL!

  • TB

    Lastly, our politicians keep referencing the "Rainy Day Fund" - it is not the job of a state government to 'save' money (tax dollars) as in collecting and 'banking' tax dollars.

  • Stuart

    Raising the Cigarette tax is a feel good move, however, it will not increase revenue to the state, it will take it away. People are not stupid, they will simply get in their cars and drive to Virginia or PA where the taxes are far cheaper and buy their cigarettes there. It will still leave us with the same Health Care costs but the Sales Tax will go to another state. Add to that the loss of jobs and then look at what you have accomplished.

    • Bitmapped

      Pennsylvania's cigarette tax rate is $1.60, higher than what the WV Senate has proposed. So is Maryland's tax rate.

      Driving to another state would be expensive and unless you're going to buy a ton of cigarettes, not worth it.

      Since higher taxes discourage smoking, a higher cigarette tax would likely help to cut healthcare costs in the future.

      • mark

        what about Va they are also a border state and their cigarette tax is much cheaper than WV. This would be a big hit to southern WV stores which border Va. The same part of the state that has been paying more than their share of the states bills for years in coal severence tax. Yet have the worst roads and water sewer systems. Take a geography lesson and you'll see WV is bordered by more than 2 states. You must be a Obama liberal. The state of WV doesn't stop just a little south of Charleston. And by the way I'm not a smoker.

    • Dave

      If you can't cut 180 million out of a 4+ billion budget half way thru the fiscal year without creating a mess of things then you need to resign from office now because you're unfit for duty!

      Yeah this Cole guy sounds like someone with some sense.

      Kessler is a joke as president and Miley is a another self server.

  • TB

    Remember when politicians say 'we' need to raise some revenue - they are talking about raising taxes. The sheep need to turn around and stop following!

  • Average Joe

    “There’s always some fear by all elected officials wondering whether constituents back home will support them if they vote in favor of any tax increase,” Miley said.
    Yet another example of doing what they need to get themselves re-elected instead of doing whats best to keep the state solvent. Term limits for everyone

  • Aaron

    This is the same Senator Kessler that's proposed a future fund for the past couple of years, right?

    If we need money and there's extra in gas, well it doesn't take a rocket scientist to figure it out.

  • Pooch

    But.....but.....Earl Ray said that we were doing so well. Snookered again!

  • TB

    Maybe we should devise a special tax to deter career politicians from leaving their campaign signs strewn along our roadways. Mr. Kessler left it up to others (DOH/the citizen's tax dollars) to pick up his signs after his last failed run at the governership.

  • John

    Why are the only cuts the Governor's Office and the Legislature seem to want to consider are "across the board" cuts? For once, have some kahunas and target specific positions that you know are wasteful. Oh wait, those people are political appointees...what was I thinking?

  • hilljack

    Cole for Governor 2016

  • Brian

    BTW, well said Mercer Co. Representative Cole!

  • Brian

    Once again I ask why this tax? Of course WV needs money but there is no sense in taxing tobacco to pay for something as unrelated as general revenue. Gas tax for roads makes sense. Pop tax for education doesn't. City taxes for officers makes sense. Tobacco tax for government general revenue uses like pens and pencils does not.

    • stophating

      A tax is a tax...... It's a huge shell game... Can put cigarette tax into health care, and then take general revenue back and spend on anything.... That's why I think future fund should be opposed by all..... It's just another version of the rainy day fund and will enlarge shell game.

    • Bob

      The money will not go to the General Fund. Per the proposed bill the money will go as follows:
      Of the increase in revenues collected pursuant to this section, the first $90 million per year for ten years shall be designated to the Bureau for Medical Services or its successor agency; adding $6 million annually for tobacco control; $1 million per year for five years shall be designated to the West Virginia University School of Public Health. Any additional moneys in the fund are to be expended as follows: Thirty percent shall be designated for oral health improvement programming; thirty percent shall be designated for substance abuse prevention and treatment programming; twenty-four percent shall be designated for in-home elderly care services; and sixteen percent shall be designated to fund early childhood development programming.

      • The bookman

        Where do you get your numbers? Do you have a SB # to reference? Kessler claims this proposal would generate an additional 90M the first year, but when applying that # to your breakdown, I'm at a loss how this would help reduce the amount needed from the rainy day fund? Maybe this is the current breakdown of tobacco tax collections? Help please?

        • The bookman

          This is a link to the bill introduced on 2/11 by Kessler et al. I don't read it the same way as above, do you?

      • Brian

        Thanks for the info Bob. Wish Shhhhhhhauna Johnson would've included that with her write-up.