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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Comments

  • good sense

    start by combining some state agencies together. For example: all of the Correctional agencies together - The Division of Juvenile Services and Regional Jail Authority should all fall under the Division of Corrections. The two Directors of those two agencies are clueless, at least Rubenstein has over 30 years of experience. The Parkway Authority should be with the Division of Highways. The Office of Technology should be dismantled and agencies should have there own tech people. These are just some common sense suggestions that should happen but it won't because it makes to much sense.

  • hilljack

    Kessler just seems to want to raise taxes on the working man period. What a buffoon. How about some welfare reform. I for one am tired of paying for 3rd and 4th generation welfare leeches.

  • Me

    I agree we need a clean up. Start with the corrupt politicians. Just look at what corruption has happened in this state the last few months, at the local and state levels!
    I hope the voters start thinking before they vote. I know in my county there is a lot of people that just vote straight ticket,,,,,,,,,Dems. or Rep. You vote you you think will do whats right and represent the people.

  • Gobbly Gook

    The WVDHHR is the sindgle most bloated state agency. there are tens of millions of $$$ that can be trimmed from that budget. It is the biggest giveaway agency. Check out the WV Works program that pays for women to get their hair done, pays for a whole new wardrobe for women, and will even buy women a vehicle.
    Check out the daycare program that pays for child daycare for women who have a job, but about 70% of those women don't have a job. They run around all day while the taxpayers pay for their child care.
    The school clothing vochures could be eliminated.
    Foodstamps, according to the USDA, are meant to be a "SUPPLEMENT" to ones food buying, not to be intended as the sole source of food buying. Therefore, foodstamps could be reduced by about 20%.
    DHHR is the biggest wasteful state agency around. Cut the DHHR budget. But Liberal, progressive DEMOCRATIC legislators don't have the stones god gave a mouse to do anything useful for the taxpayers.

  • cutty77

    WV has no choice but to raise taxes on something. We are in trouble worse then people realize.Cigs are a Great Place to Start. Because all of us pay more insurence because of smokers in this State. I wish we would Tax Fast Food too,another Health issue. WV is a Fat and Out of Shape State.

  • TLC

    Sounds to me like this is a perfect example of a rainy day. Raising taxes is a crazy idea. Cut some money or move it around is fine. The rest comes out of rainy day.

  • EP123

    What is the hole going to be once the Affordable Care Act $s dry up from the federal government and all the cost is the responsibility of the state?

  • EP123

    Should of said when times were good in regards to the repeal of the food tax; not lean.

  • bill

    How about a 5 cent increase in the price of a beer!

  • EP123

    WV Hillbilly, while I agree that removing the food tax was probably not the smartest move, I remember that it was the Republicans who screamed for the immediate repeal of the tax when times were lean. Joe and ERT slowed it down to a gradual decrease. And, for the record, I am a Republican.

    As for the Rainy Day Fund, wasn't the fund created for lean times in revenues like we are facing and / or other emergency measures?

  • 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

      +1
      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

      Vienna:

      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.

      Joe

      • 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:

        http://www.budget.wv.gov/executivebudget/Pages/recommendedbudget.aspx

        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.