CHARLESTON, W.Va. — A budget package to be under discussion by the Legislature starting Thursday includes elements of a state Senate plan, but some senators are questioning the wisdom of gathering before a solid agreement is hatched.
“I would love for the governor to change course,” Senate Majority Leader Ryan Ferns said in a Monday telephone interview.
“I don’t know if calling us in early was part of a strategy of some sort, maybe trying to pressure people into reaching a compromise. I would love to find out he’s changed his mind and decided to delay things a couple of weeks.”
The Justice administration has been focusing on negotiations with state Senate leaders that would blend the Senate majority’s desire to cut the state income tax with the governor’s tax and highway revenue proposals.
Republicans in the House have objected to portions of the package that would raise the state sales tax from 6 percent to 7 and raise additional taxes on businesses — whether in the form of a gross receipts tax or an increase in the corporate net income tax.
They’ve also been skeptical of proposed taxes and fees to raise more money to build and maintain the state’s roads and bridges. Their preference is a statewide vote on approval of a bond package for infrastructure.
MORE: GOP delegates express doubt about budget deal
When he announced the special session, Justice said the budget package that will be under consideration will include “modest additional cuts” but will largely avoid the cuts present in an earlier legislative budget that he vetoed.
“If we can pull that off, just think about it. We’ll be able to do that without cutting into higher ed, without cuts to DHHR, without cutting into K-12,” Justice said.
“How good could that possibly be? If you could vote no to this, what are you voting yes to?”
Ferns is concerned that while leaders hash out the details of a possible budget compromise, rank-and-file members will largely be waiting at a total rate of $35,000 a day.
“There’s nothing worse than trying to call us in without a plan and having us sit there or days on end,” said Ferns, R-Ohio. “The reality is 134 people plus the governor’s office can’t all weigh in.
“There’s going to be small meetings and those results will get relayed to a lot of the caucuses and bodies. There will be a lot of downtime for a lot of the legislators. I’d rather us get closer to an agreement before we come in and start spending taxpayer dollars.”
Ferns said Senate leadership has been in conversations with House leadership since the regular 60-day legislative session ended April 8. But Ferns said he has to believe Speaker Tim Armstead when he says the Justice administration has not been in recent negotiations with the House.
“I don’t see that strategy,” Ferns said. “It’s going to take all three entities to get a budget passed. You can’t cut one out. I think it’s fine for two sides to talk and try to convince the third, but you can’t leave the third one out.”
If the Senate and House were to agree to a plan, Ferns said, it could be one modeled on the Senate’s proposed changes to the state personal income tax.
That model would raise and broaden the state sales tax a few months before the income tax is reduced, providing a financial cushion for the coming fiscal year.
Under the scenario of a House-Senate agreement, the governor could lose out on the tax increases he has backed, including additional tax hikes on businesses and, possibly, increased fuel taxes and DMV fees meant to improve state roads.
“That’s something I think the majority of members of the Legislature could get on board with,” Ferns said. “It would put the governor in a challenging position in that it doesn’t have what he felt were draconian cuts. It would have the majority of the cuts restored.”
Senator Robert Karnes, who spent much of the past legislative session overseeing a possible Senate tax plan, also expressed doubts about calling the Legislature back into session before leaders have general agreement on a plan.
“A lot of the stuff the governor has done has been very political. I think the purpose of him wanting to call this way is to be able to say ‘These guys can’t get anything done,'” said Karnes, R-Upshur.
“If we were talking about the second or third week of June then he’s got to call us in, but we’re not there yet.”
Karnes advocated for the leaders of both houses getting together with representatives of the administration before the rank-and-file is called in. If a deal were worked out, leadership would still have to assess whether their caucuses would buy in.
“If we had a framework of an agreement you could hammer out some final details,” Karnes said in a Monday telephone interview.
“When leadership thinks you have an agreement it doesn’t mean everybody is on board, but they do have a sense of where their membership wants to go so they can put together a basic framework and have something that moves quickly.”
Without that framework already in place, Karnes suggested, there’s likely to be a lot of waiting and watching by most lawmakers.
“Membership is going to sit around if they’re not directly involved, waiting for leadership to come back with a deal,” Karnes said.
“If we work a deal out in advance, it doesn’t cost the taxpayers anything. If we try to do what we’re doing, we’re we’re going to pay a bunch of legislators and staff to wait around while leadership is having the same discussion they’d already have to have.”
One possibility of the governor’s strategy is trying to pass a budget through the Senate and then putting pressure on the House. Karnes says he doesn’t believe such a strategy is likely to pay off.
“I think he is maybe thinking along those lines, but I don’t think it will work,” Karnes said. “At least as it relates to some of the proposals we’ve had out there, the House is pretty well dug in.
“If that’s his goal it won’t produce the result he wants to produce. It could backfire on him in a bigger way. There’s some House members that are extremely angry. I think that’s really what’ll happen is it’ll exacerbate that.”
Senator Ed Gaunch expressed hope that some agreement could be reached among the houses before the special session begins.
Gaunch was participating today in a discussion among Senate and House leaders, about his third such meeting since the regular session came to a close.
“I think it’ll be close. I think there could be the outline of a deal. I would prefer to have the House on board with something so we can go in and deal with a specific proposal,” said Gaunch, R-Kanawha.
“Right now we’d be dealing with the governor’s proposal he has vetted somewhat with the Senate. So you could pretty much count on the Senate passing something but I’m not sure you could count on it passing the House.”
Despite the differences among the two houses and the governor, Gaunch said he believes there’s a chance for common ground.
“My goal would be to try to get a plan the House and the Senate could agree on that wouldn’t be far from where the governor wants to go,” Gaunch said. “A last resort would be to go and tell the governor ‘This is what we think we can agree on; can you get on board?’ I hope we can do that.
“That would be far more preferable to me than going in Thursday with less than the reasonable assurance that both houses of the Legislature could agree on the plan we’ve been asked to vote on. I’m still optimistic that’s possible.”
To Gaunch’s mind, an agreeable plan would be one that keeps state government spending in check while also making changes to the state’s tax system.
“I hope we can come up with a plan that maintains or controls spending to the level that we’re spending right now with the midyear cuts in place and are able to do that from the Senate standpoint with some tax reform built in – in terms of moving us from an income tax base to a consumption base,” he said.
Senate Finance Chairman Mike Hall expressed concern over a lack of consensus among the two houses and the Justice administration as the special session nears. He said it’s unlikely the Senate would try to force a budget plan past the House.
“There’s going to be conversation between the House and the Senate. I don’t think the Senate’s going to try to override the House in the sense that we need to have a full conversation to try to get something done so that we don’t have a situation where the Senate tries to pass something and the House doesn’t pass it,” Hall, R-Putnam, said Friday.
“I like to think of the next move on the chess board. If this is a nonstarter in the House then what’s next? Do we get to the point where we try to fix this for this year and then spend the whole year being serious about making changes in our tax law? I don’t know that this impasse or whatever you want to call it gets solved in the next week or two.”
Senate Minority Leader Roman Prezioso also expressed doubt over whether an agreement will be reached quickly in the upcoming special session.
“Here’s the way I see it: Everybody is going to have to compromise on issues sooner or later because there are are too many issues involved to put this thing together,” Prezioso, D-Marion, said Friday.
“The problem is some of the points that we’re talking about are big issues that involve a lot of people.”
Specific pieces of the governor’s budget package — like severance tax or income tax tiers — could affect whether legislators can get on board, Prezioso said. As legislators look at the components of the potential budget package, they tend to have more questions.
“I don’t know if we’ll be ready by Thursday,” he said.