CHARLESTON, W.Va. — Republican leaders in Charleston are adamant about making spending cuts and going light on taxes and tax increase while Gov. Jim Justice has been just the opposite in his public discussions about the budget.
One plan some lawmakers are touting is to refinance the state’s pension debt. The idea would be to extend the state’s payments on pension debts to gain a lower annual payment.
The idea doesn’t sit well with state Revenue Secretary Dave Hardy. Hardy, speaking on MetroNews “Talkline” Monday, indicated the state has 17 years left on a plan executed in the 1990’s which aimed to get the state caught up on the pension debt in 40 years. It’s a plan Hardy said has become a model to other states dealing with the same struggles. However, changing it in the middle is not a good idea in his mind..
House Finance Committee Chairman Eric Nelson (R-Kanawha) predicts extending the debt to 30 years would save the state around $80 million in annual contributions. Hardy didn’t disagree, but added it’s not a savings.
“It wouldn’t be a whole lot different if you decided you had 12 years left on your mortgage and you were going to refinance for 30 years,” Hardy explained. “Sure your payment will be lower, but in the long run you’re going to be paying substantially more and in this case actuaries show the interest would be approximately $3 billion.”
Despite the disagreement over the best way to tackle the looming $500 million budget deficit for next fiscal year, Hardy did have some good news in his appearance on Monday’s show.
“There’s been a lot of good dialogue late last week between the Governor and the House and Senate Leadership about moving forward,” said Hardy. “I’ve got my fingers crossed and I’m cautiously optimistic that we’re going to get there.”
He said a lot of different ideas are being discussed in those closed door meetings at the State Capitol. One of those which draws more criticism from Hardy is the plan to restructure the state’s tax system. Hardy believes it’s the wrong time to tackle it.
“I don’t know that you could time it worse,” Hardy said. “The income tax is roughly 45 percent of West Virginia’s revenue. It doesn’t seem like a good idea to address that complicated issue at the same time you’re in a financial crises.”
The legislative session comes to a close two weeks from Saturday.