The 3rd day of the Legislature’s special session to work on the budget produced its share of drama.
The Senate had a contentious debate before finally advancing on to third reading a bill that would raise tobacco taxes. The proposed .45-cent-per-pack increase in the cigarette tax (to a total of $1), an increase in the smokeless tobacco tax from seven percent to 12 percent and a first-ever tax on e-cigarette liquids would raise an estimated $78 million.
However, the measure advanced only after Senator Ryan Ferns (R-Ohio) withdrew his amendment to exclude smokeless tobacco from the tax increase. Democratic Senators heaped scorn on Ferns for trying to protect smokeless and chewing tobacco from higher taxes since he happens to be chairman of the Senate Health and Human Resources Committee.
Ferns was likely trying to help House Republican leaders who are working feverishly to try to cobble together 51 votes to pass a tobacco tax. One Senate source speculated that exempting smokeless tobacco may have helped pick up a couple of votes.
Meanwhile, on the House side, the increasingly strained relationship between the ultra-conservative Liberty Caucus and the rest of the Republican House members has reached the breaking point. About ten members of the Liberty Caucus decided to break with tradition and meet behind closed doors with House Democrats to talk about the ongoing budget issues.
One Capitol observer said the rest of the GOP Caucus was incensed, questioning what the Liberty Caucus hoped to accomplish. House Republican leaders could decide to punish the outliers, but Armstead is not known for heavy-handed tactics.
Meanwhile, House Speaker Tim Armstead and Senate President Bill Cole had a back-and-forth with Governor Tomblin about the special session. Armstead and Cole asked the Governor to expand the call to include a series of cuts ranging from defunding the Greyhound Breeding Fund to eliminating the Secretary of Education and the Arts.
The Governor responded that he is “willing to discuss additions or alternatives to the items I placed on the initial call, but only if they are part of a comprehensive, realistic solution to the state’s budget situation.” In other words, go ahead and include the cuts in the proposed budget and he’ll take a look at them.
Still, amid the maneuvering and theatrics, the tobacco tax increase is moving. It should pass the Senate today and then head to the House, where Finance Committee Chairman Eric Nelson (R-Kanawha) wants to take quick action.
“To help expedite the process, I don’t believe that that needs to come back up and be rehashed in the (House) Finance Committee and take an extra day,” Nelson told me on Talkline Wednesday, adding that he supports the bill.
The tobacco tax increase could serve as a linchpin for a budget deal. If both chambers can agree on the revenue side, that may clear the way for some consensus on cuts and borrowing from the Rainy Day Fund to fill the $270 million hole in next year’s budget.
But if yesterday is any indication, achieving accord on the most controversial parts of a budget deal will be a delicate balancing act.