CHARLESTON, W.Va. — The good news is, budget bills are up for passage in both houses of the state Legislature today.
The bad news is, loving these budgets might depend on if you’re the one birthing them.
“I think there’s something in this for everybody,” House Finance Chairman Eric Nelson said Tuesday afternoon. “When situations are difficult, this budget is going to be difficult and not please everyone.”
The state Senate’s $4.102 billion budget proposal, which is on third reading today, makes good on the GOP leadership’s promise to keep spending in line with revenue estimates for the coming fiscal year. It would make significant cuts to higher education and healthcare spending.
The House’s $4.24 billion version, also on third reading, would include a $137 million “broadening the base” tax proposal that includes a new tax on cellphones and landlines to raise millions in new revenue. It, too, cuts higher education and healthcare, but not as deeply. It does establish a single line item for higher education institutions and delegates cuts to the Higher Education Policy Commission.
This is not Gov. Jim Justice’s idea of a good time.
“I am really frustrated. I guess the right word would be sad,” Justice said Tuesday during an appearance on MetroNews’ “Talkline.” “Mister T would have said ‘I pity the fool.’ And we’re the fool. The people are the fool.”
All three of the possibilities, counting the governor’s own $4.394 billion budget proposal, are up against the clock to resolve the state’s estimated half-billion-dollar budget gap for the coming fiscal year. The grand finale of the 60-day legislative session is Saturday.
The governor’s dire prognosis notwithstanding, Nelson said he thinks the proposals can result in success by then.
“I’m an eternal optimist, and so I would hope we could come to something,” said Nelson, R-Kanawha. “We’ve been changing our plan as we’ve moved through the process. He’s done a little bit of that but he’s dead set on a couple of areas.
“At the end of the day it takes 51 votes in this chamber to get through and at times I think he forgets that. It’s not like running his business where he can just go dictate to someone what has to be done. We have 51 or more bodies that you must convince. We’re working on it, and I look forward to working with him.”
First things first, though, Nelson said.
“We first have to get it out of this body.”
Justice says he wants all segments of West Virginia society to share the burden of balancing the budget — the wealthy, businesses, regular people and government.
Senate Republicans say the state should live within its means, and Senate leadership says the budget from that body reflects that.
House Republicans say they are only willing to pursue additional revenue within the framework of tax reform. They call their philosophy broadening the base — to eliminate loopholes for some business sectors. House Democrats indicate that if Republicans are going to raise taxes, they need to call it just that, a tax increase.
Still, there’s common ground here and there.
The House’s bill has some items in common with the governor’s proposals. The telecommunications tax is an element of both. Both also include new taxes on personal services.
Both the governor’s and the House’s proposals have elements taxing business, but the governor’s plan takes the form of a .045 percent commercial activities tax, while the House plan would impose an end-use tax on communication and transportation purchases at the state’s 6-percent sales tax rate.
The House plan also counts on almost $14 million through eliminating the state’s role in supporting greyhound racing. Justice would keep the greyhound breeders fund.
Justice notes that his plan would cut $55 million from the budget. It would raise about $224 million in taxes.
The House plan cuts some aspects of what Justice wants, including his proposed payraise for classroom teachers and his SOS fund for infrastructure and economic development.
Senate Finance Chairman Mike Hall wouldn’t mind having the House’s budget package in conference committee as the two houses resolve their differences. Hall is interested in whatever revenue the House might raise through its “broadening the base” bill.
“If they pass that revenue element and it’s agreed to by the Senate then not all of our problems are solved, but it makes it a little bit easier if you go to conference with $150 to $200 million in new revenue,” said Hall, R-Putnam.
The Senate’s proposal includes $50 million in cuts to higher education and $47.7 million in cuts to the Department of Health and Human Resources. It makes up for $77 million in cuts to education through a bill that would raise about that much in property taxes.
Senate President Mitch Carmichael said on Tuesday that the Senate’s bill delivers on time and within the available resources.
“We got this,” Carmichael, R-Jackson, said. “We delivered what we said we would do. What we delivered was the campaign promise that the governor ran on. What we did in the Senate is we delivered on that promise.”
But if the House doesn’t agree — or if the governor vetoes — Hall is already thinking about other resolutions.
One possibility, as much as everyone has said they want to avoid it — is another dip into the state’s Rainy Day Fund.
Hall said doing so could prevent the state from cutting Medicaid funding that receives matching funds from the federal government.
“We’re sitting on $600 million to $700 million of revenue shortfall reserve money, and if a martian landed on earth and looked at the situation and said ‘Well why cut these things if you still have $600 million sitting over here?’ — particularly if you can get 3-to-1 money from the feds, just take money out of savings and do it.”
Hall said making that move is going to be his suggestion once the House and Senate bills have to be reconciled. That would happen in conference committee.
“I’m going to advocate that we not do these draconian cuts to higher ed or to Medicaid but rather fill the gaps in with cash and do our matching money and just try to bump along,” Hall said Tuesday.
For now, though, Hall thinks the Senate is almost certain to pass out its budget that goes heavy on cuts. Once the two houses get together to work out one budget — that’s anyone’s guess.
“I think that’s the budget that will actually end up being sent to the House. I don’t see any will to amend it,” Hall said.
“But then we get into conference and face the stark realities of a conference committee report that would be so cut that you might not get 50 votes over here or 18 votes over there. So you probably do, in that dialogue, have to think of bringing some cash in at least for a while. That’s where I think we could solve the problem.”