Governor Jim Justice’s Chief of Staff Nick Casey has raised the possibility that the Governor will allow the budget approved by the Legislature last weekend to go into effect without his signature. If so, that would represent a concession by Justice that despite his almost daily public lobbying and periodic private meetings with legislative leaders, he simply cannot impose his will on the Legislature.

The House and Senate voted along party lines at the end of the session to send the Governor a $4.1 billion spending plan for next fiscal year that includes no tax increases, continues two percent across the board cuts, trims $29 million from higher education (8.5% from WVU and Marshall, 4% from the smaller schools), cuts three percent from the Department of Health and Human Resources and takes up to $90 million from the Rainy Day Fund.

Republican leaders point out that before the session began, the Justice administration indicated deep cuts were on the way, but the Governor did an about face, calling instead for fewer cuts and higher taxes.

He cobbled together a new framework with Senate President Mitch Carmichael in the closing hours of the session that included much of what the Governor wanted—higher gas taxes for road construction, a small tax on business gross receipts and an increase in the state sales tax, all blended with the Senate’s planned step-down of the state income tax.

However, Speaker Tim Armstead has told the administration that plan is a non-starter with the House Republican caucus, which reportedly became more united than any time during the session after the Senate and the Governor revealed their late night proposal.

Casey, during an appearance on Talkline Tuesday, said there currently is no avenue for negotiation. “’The House has kind of put their foot down with us,” Casey said. “They’ve made up their mind.  They’re fine with it.”

It’s hard to imagine Justice throwing in the towel and accepting the budget proposal, even if it’s only a tacit approval by allowing the document to become law without his signature.  He’s way too competitive to accept a financial plan that he truly believes is not in the best interest of the state.

However if he does, we have to see how the budget plays out with the public. One theory is the cuts kick in, state agencies adjust and West Virginia continues to function normally.  That would be a victory for Republicans who can say they successfully cut the budget and stopped the Governor from raising taxes.

But the opposite could happen. The cuts are felt by the public, the roads continue to crumble and the state’s economy remains tepid. Justice can blame those problems on the “dog-mess” budget Republicans presented him with.

We should find out tomorrow. The Governor has scheduled a “major budget announcement” for 2 p.m. at the Capitol.

Meanwhile, the state continues to struggle with budget problems this fiscal year.  The Governor scraped up $60 million from state accounts to help offset the current budget shortfall, and he is authorized to dip into Rainy  Day to make up the rest. Additionally, tax collections are improving somewhat, so that could help.

But just yesterday, the Governor ordered the State Department of Transportation to delay payments to vendors by up to six weeks (the previous threshold was three weeks).  Similar slowdowns in state agency payments may follow.

 

 

 

 

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