CHARLESTON, W.Va. — With just about one-third of the West Virginia legislative session remaining, lawmakers and Gov. Jim Justice are feeling each other out over whether there’s room for compromise on their visions for the state budget.
“This process, you have to put something on the table to start the dialogue and the negotiation process and the compromise,” Justice said Friday afternoon during a conversation with reporters.
That’ morning, Justice had met with legislative leaders, including Senate President Mitch Carmichael and House Speaker Tim Armstead.
Justice has presented a couple of options for his budget, but both rely on millions of dollars of revenue enhancements, mostly tax increases. He says increased revenue is crucial to reinvest in the state.
The Republican majority in the Legislature last week presented its own vision for the budget. They say their budget will not exceed the state’s $4.055 billion revenue estimate. To fill the coming fiscal gap, the GOP specified $277.7 million in budget measures but left $150 million undefined.
“How do we turn this state around?” Carmichael asked Friday on “Talkline” with Hoppy Kercheval. “The governor has one view on it, the Legislature and the people of West Virginia, I hope, have a different view.”
Justice announced a couple of additional changes to his budget proposal on Friday. He said he wants to bring back 15 of the 37 state foresters who were laid off last summer, and he wants the coming year’s budget to reinstate $4.6 million for public broadcasting.
Public broadcasting was among $26 million in proposed cuts in Justice’s original budget presentation.
Justice received criticism for that proposed cut, as well as to cuts to programs such as fairs and festivals. On Friday, he said the amount of criticism he received over relatively few cuts demonstrates how difficult it will be for the Legislature to specify $150 million in spending reductions.
“I put things out there that really didn’t amount to a whole lot of money and everybody shot at me like crazy. And now everybody is coming to the realization that ‘Dag, there’s not these meaningful, wasteful cuts that we can make without really getting into the bone and really hurting us,'” Justice said.
The governor went on to acknowledge the Legislature has a different point of view, but he will continue to support the basics of his own proposal, which includes increasing the gasoline tax and DMV fees to pay for increased investment in state highways and bridges.
“So at the end of the day, I would say anything and everything is on the table. But the whole deal will boil down to philosophy,” Justice said. “And the philosophy will be balance the budget without crippling us and the whole philosophy will be create immediate jobs and jumpstart our state and quit selling promise and potential and opportunity – create immediate jobs, and that’s what our roads thing will do.”
Carmichael on Friday described a similar goal but a different approach. He said West Virginians can’t afford a greater tax burden, and Carmichael said his preference is promoting growth through tax reform.
Both houses of the Legislature have tax reform proposals that would broaden the consumer sales tax while establishing a flat income tax.
“This is a fundamental debate about the role of government,” Carmichael, R-Jackson, said on “Talkline.” “We want to raise more revenue by generating growth in the economy. We want to incent growth, jobs and opportunity.”
Carmichael said he hopes the governor will come to see the matter the way the legislative majority does.
“The Republican leadership in West Virinia is trying to structure this government to make it smaller, more efficient and to live within the means that we have,” Carmichael said.
“I hope that is his approach. If we can just get the people of West Virginia to say, ‘Governor we reject these new taxes, we want to live within our means and to stop putting debt on our children’s back or taxing our citizens into poverty.'”
House Finance Chairman Eric Nelson said last week on “Talkline” that he thinks there is more progress being made between the governor and lawmakers than the public realizes.
“We’re getting down to the meat and potatoes part of our budget,” said Nelson, R-Kanawha. “We’re talking about his proposals, we’re talking about ours and we’re working our way to a solution. I always come out of a camp on looking for compromise.
“It’s not only a compromise with the governor but with members to get the appropriate legislation through. Each of these meetings and each day that goes by that we get closer and closer to these issues we can compromise on.”
If legislators still need to identify $150 million in cuts, they would almost certainly have to come from the big three budget areas of education, higher education and the Department of Health and Human Resources.
Each of those presents complications for cutting, Nelson said.
“When one looks at those three areas, they make up 80 percent of our general revenue,” he said. “K-12 is all tied up with the school aid funding formula. If you get into that formula, the biggest area would be personnel. There is a lot of concern on our side about not wanting to see any job losses as it relates to K-12.
“On the DHHR side, there are many programs we have looked at and vetted out. Cuts of that magnitude could be problematic. We’re vetting that out very quickly now as we look to put this document together.”
On higher education, the state’s college and university presidents are already pushing back, saying their campuses have already coped with cuts over the past few years.
“From each one of them we heard the negative effects on institutions, students and what resonated most is negative effect on communities,” Nelson said. “These little schools are the community. I think we’ll hear more from them the next couple of days.”
West Virginia University President Gordon Gee was among those expressing caution about cuts.
“The university is the single largest economic engine in this state,” Gee said last week on “Talkline.” “Why would you reduce the university’s budget when we’re a revenue generator. It means we’ll have to raise our own tax which is tuition on parents, which in itself is not good.”
If legislators determine they can’t limit spending more than they already have without hurting essential government services, there could be some acceptance of revenue measures, Nelson said.
“I think after fully vetting and seeing where we can be on our spending, after we have looked at all those line items if there are still a number of services still in need, we’re going to have to look that way,” Nelson said. “One of the main areas would be a broadening of the base.”
Nelson said that whatever budget formula lawmakers settle on, it should become apparent this coming week.
“Bills have to be out of both chambers on the 29th, and for that to happen they have to be out of committees next Saturday. So you will see through next Saturday any legislation that requires a cut or that will result in a cut or any legislation that will result in revenue,” Nelson said.
“I would hope that you’d see a framework of a budget as of next Saturday. I’m committed the following week to have a budget out of House Finance Committee.”