Movement quickens on budget talks between governor, legislators

CHARLESTON, W.Va. — Budget talks appeared to be picking up the pace at the state Capitol on Monday evening.

House Republican leadership and then Democrats from both houses met with Governor Jim Justice, back to back. All sides suggested more progress than has been made to this point, but no immediate agreement.

Everything happened rather abruptly.

With tax reform proposals under consideration this afternoon on the House floor and in Senate Finance, everything came to a stop.

A House floor session that was supposed to begin at 4 p.m. was moved back to 5 and then again to 6. Some rank-and-file Republicans said members of leadership were caucusing with Justice.

At 5 p.m., a Senate Finance meeting that was underway abruptly came to a halt. Committee Chairman Mike Hall said Senate President Mitch Carmichael had asked for an hour’s pause and for the meeting to break up.

Only Republicans remained in the room. Some of them said Democrats had left to caucus with the governor.

Those who were emerging from the late-afternoon sessions said they were more substantial discussions than were had previously. They were searching for common ground.

“I don’t want to say that we’re almost there, but we’re further along than we were two hours ago,” said House Minority Leader Tim Miley about 6:30 p.m.

As the House came back into session shortly before 7, Finance Chairman Eric Nelson also described significant progress — although not yet a deal.

“Without a doubt, there was some common ground that we both spoke of, and there are some areas we still have to work out,” Nelson said. “Obviously this is a two-way street.

“It’s just not all Republican plan. We need 51 votes here. I think that has to be a bipartisan issue.”

During the House floor session, both sides agreed to reserve the right to formulate a joint amendment to a tax reform bill that was up for second reading. The bill was moved to third reading with the potential amendment — plus all the others — pending.

Nelson and Delegate Brent Boggs, D-Braxton, who is the minority chairman on House Finance were those reserving the right to work on an amendment together.

Prior to that, there were so many proposed amendments to the tax reform bill that a yardstick was required to support them.

One nonstarter for the governor is the proposed refinancing of the teachers retirement system being considered by House Republicans. That gains $70 million this year but was calculated to cost $1.5 billion over the course of the refinanced loan.

The governor also has described his own revenue preferences as a matter of everyone having skin in the game. In particular, he says he would like for it to be clear that businesses and the wealthy are doing their part.

That calls into question whether he would be willing to support a 5.1 percent flat tax that is part of the package under consideration in the House.

Republicans may be unwilling to embrace a tax increase outside the scope of tax reform. They contend removing exemptions on some personal and professional services already represents a business component in their plan.

House Speaker Tim Armstead described progress but no agreement.

“I think there was some progress made,” said Armstead, R-Kanawha. “We’re going to continue to have those discussions.”

He added, “I would say the conversations today were much more cordial and we really dug into the meat of some of the concerns.”

But, Armstead added, “We have a number of very big issues we would need to continue to talk about and try to resolve.”

The House was the epicenter of today’s budget talks because that’s where a possible plan was laid out Saturday in House Finance.

Reducing and doing away with the income tax is also a key component of tax reform under consideration by the Senate’s Republican majority.

The Senate Finance Committee passed that house’s version of tax reform out Monday evening, but it was laid over one day during Monday evening’s Senate floor session. Wednesday is crossover day, the deadline for bills to be passed out of their house of origin.

Democratic senators were among those in discussions with the governor today.

“We’re now willing to sit down and talk,” said Senate Minority Leader Roman Prezioso. “Theatrics are over. We’re down to crunch time. We need to talk about the seriousness of the issue, and I think all parties are ready to sit down and talk.”

He added, “We’re talking and that’s the first step. We haven’t done that before.”

All sides are facing a budget shortfall of about a half-billion dollars for the coming fiscal year.

Earlier today, appearing on a Town Hall version of “Talkline” with Hoppy Kercheval, Justice appeared more optimistic than he has in recent weeks.

“We’re moving. We’re moving in the right direction,” Governor Jim Justice said during a Monday radio town hall on MetroNews “Talkline.”

He added, “I don’t think anybody’s going to get dug in and I think we’re going to all sit and good ideas are going to come out and we’re going to go with those good ideas and we’re going to get this thing done.”

Justice, during his State of the State and thereafter, proposed a budget built on $450 million in revenue enhancements, mostly tax increases. His budget proposal amounted to $4.5 billion.

The Republican majority, two weeks ago, presented its own budget framework cast as spending no more than the $4.055 billion revenue estimate. The framework left $150 million undefined, and GOP leaders said that would be filled in by cuts — likely to education, higher education or healthcare.

A $4.27 billion budget outline presented by Nelson and the House Finance staff on Saturday afternoon shoots down the middle.

Some tax reform elements of the House Finance package were laid over from this morning’s House floor session and were set to be considered this afternoon or this evening.

Nelson said avoiding some of the big cuts that Republicans earlier described is one reason Justice and his fellow Democrats might want to find a way to support the House Finance proposal.

“You all have heard about various levels of cuts, I think that’s an option,” Nelson said Saturday. “So if someone wants to make sure all the Promise Scholarships are funded and that our universities are funded, well then that’s a reason to look at the option that has been put on the table.

“Likewise, the programs in DHHR, the IDD waiver, these are important programs to many people. If some of that fails then we have to look at some of those programs.”





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