CHARLESTON, W.Va. — The day before a special session to work on the state budget, the two leaders of the Senate and House of Delegates have very different perceptions of how it’s going.
Senate President Mitch Carmichael is excited about a compromise proposal that couples his caucus’s desire to lower the state’s personal income tax with Gov. Jim Justice’s tax proposals.
House Speaker Tim Armstead says that package goes too heavy on other tax increases, that his caucus has too many concerns about aspects of the budget package to support it, and that Governor Justice has not been a willing negotiator.
When lawmakers gather in Charleston for the special session starting Thursday, it’s these two perceptions that are certain to collide.
“There is agreement between the governor and the Senate,” Carmichael said today on MetroNews’ “Talkline.” “It is an optimistic vision that cuts taxes on every wage earning West Virginian, which is a dramatic departure from the original proposal the governor introduced.
Carmichael went on to say, “It’s been communicated by the Speaker that the plan will not pass. I take him at his word on that.”
Appearing later on “Talkline,” Armstead says that about sums it up.
“I don’t believe it’s going to pass the House,” Armstead told “Talkline” host Hoppy Kercheval. “While Mitch was on the radio talking with you I was getting texts and messages from my members. The fact that we’re raising the sales tax is a huge problem with a lot of our members. I just don’t see that getting across the finish line.”
In this case, coming up with a state budget isn’t just a matter of making revenues meet expenses. Various facets of the budget package advocated by the governor and the Senate majority have been under scrutiny.
A tiered system for severance taxes remains up in the air, with coal and natural gas representatives in talks with elected leaders; a controversial commercial activities tax is being switched to an increase in the corporate net income tax; and the proposal to reduce the personal income tax while raising the states sales tax has support in the Senate but faces skepticism in the House.
Legislators will also be considering the governor’s proposals to raise fuel taxes and fees at the Division of Motor Vehicles to provide millions of dollars in funding for highway and bridge improvements. He says that will create thousands of jobs and spark the state’s economy. The House majority would prefer to first let citizens vote on a bond proposal for highways.
MORE: No shortage of sticking points in potential state budget deal
Justice has described the budget package as an investment in the state’s future and as a way for everyone in the state to participate in getting West Virginia back on its feet after recent economic struggles.
The governor has insisted on some aspects of the plan, such as specific fiscal roles to play for businesses and higher-income taxpayers. But he has also been willing to alter some parts — for example trimming down a Save Our State fund proposal and scaling back an original proposal for taxes on business.
Carmichael says those moves, plus a willingness to embrace the Senate majority’s income tax reduction proposal, shows the governor has been willing to deal.
“He came to the State of the State address and wanted nothing but tax increases; there was no tax reform. All of that has been removed,” Carmichael said.
The Senate president said he hopes his Republican colleagues in the House come around to that viewpoint too.
“I’m hopeful that as they learn more about this concept of cutting taxes and living within your means that a Republican-led Legislature would embrace that approach,” said Carmichael, R-Jackson.
But if Republicans in the House don’t embrace that plan, Carmichael said, a new plan will be necessary.
“I guess it would be incumbent upon the House to offer their plan,” he said. “If they don’t agree with this, show us a different path.”
Armstead says Republicans in the House largely favor a budget concept that broadens what is taxed, including additional services and telecommunications, while lowering the sales tax rate overall.
“Our plan we had with broadening the base and lowering the sales tax rate stabilized this budget. This doesn’t,” said Armstead, R-Kanawha.
He added, “Why the Senate wants to give him that and say we get what we want, I don’t think we get what Republicans want out of this, which is a fair tax structure that we can manage.”
Armstead, Carmichael, Justice and other state leaders gathered Tuesday to talk about the budget. Armstead said that was the first time in 15 days he had discussed the budget with the governor as negotiations focused on the Senate.
“We needed to be in the room together for the last couple of weeks, and that didn’t happen,” Armstead said.
Armstead predicts Republicans in the House will wind up voting against the budget proposal as it’s currently constructed.
“We’re not going to have agreement on this, and I don’t think his plan will pass. Then we’ll have to get in a room like we should have all along,” he said.
The Speaker said the best course at that point would be to send rank-and-file members home while leaders stay and work with the Justice administration.
“I think it would be more likely we would want to take a break and have the leadership get in the room with the governor,” he said. “You don’t do that with 134 members here every day waiting for that to occur.”