6:00: Morning News

‘I hate the tax increases’ but governor says he sees no other way

CHARLESTON, W.Va. — Governor Jim Justice is denying claims he’s violating his campaign pledges to the West Virginia voters who elected him by proposing a budget that includes $450 million in revenue measures, mostly tax increases, coupled with nearly $27 million in spending cuts.

On Thursday’s MetroNews “Talkline,” the day after Justice’s State of the State Address, Hoppy Kercheval asked Justice this question: “Would you concede that you misled people during the campaign?”

“No, I wouldn’t,” Justice responded. “No, I wouldn’t. I think that’s terribly unfair.”

His proposed revenue measures include the following:
– Sales tax increase of .5 percent to generate $92.7 million
– Elimination of tax exemptions for professional services and advertising for $87.6 million
– Creation of .20 percent Commercial Activities Tax on gross revenues for $214 million
– End to General Revenue subsidy to State Road Fund saving $11.7 million
– Redirection of one time Workers’ Comp Debt Fund revenue redirect for $38 million

Revenues from two other proposed measures would be dedicated to tourism:
– Increase to Beer Barrel Tax from $5.50 to $8 for $2.8 million
– Increase to wholesale liquor mark-up from 28 percent to 32 percent for $2.8 million

“I hate the tax increases. I hate ’em, but we’ve got to find a way that the patient, the factory, the state is a viable entity,” Justice said Thursday.

On the campaign trail, he said repeatedly, “You cannot tax our people anymore. They can’t stand it.”

During an October gubernatorial debate, Justice touted several possibilities to improve the economic picture, including sweeping accounts, a federal environmental subsidy to promote the timber industry, what he believed was a trend toward rising coal prices and a short-term loan of millions of dollars.

“The alternative is cut, cut, cut or tax, tax, tax — and I don’t believe in either of those,” Justice said at that time.

At a separate debate, Justice said he did not want to raise taxes or make cuts, and said the alternative was economic growth. “You will not be able to cut your way out of this mess. You have to some way grow your way out of this mess,” he said then.

Now that he’s in office, Justice sees his budget proposal as the “most painless path.”

“I don’t want our people to pay more taxes, I don’t,” Justice said Thursday.

“I don’t want that in any way, shape, form or fashion, but I do not know a way now, that I’ve seen what I’ve seen, I do not know a way that I can keep our state being a state that is viable, a state where people will want to come to and do it in a way less painless than what I’ve already come up with.”

On Wednesday, members of the Justice Administration provided an “alternative budget,” one reflecting cuts of $450 million and no tax increases.

With that possibility, “We can get there and have a balanced budget but, at the end of the day, if you do that and you have a balanced budget, what have you got?”

The current West Virginia budget is $4.2 billion. Justice has proposed using $123 million from the Rainy Day Fund to balance it before the close of June.

His proposal for FY2018 with its projected shortfall of $500 million totals about $4.5 billion.





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