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Governor says budget bill to be introduced; Senate to amend revenue bill

CHARLESTON, W.Va. — Gov. Jim Justice says a budget bill is ready and will be sent to legislators for consideration later today or Tuesday morning.

Meanwhile, the state Senate has referred a revenue bill passed by the House of Delegates to two committees for likely revision.

The Senate is poised to amend its own version into the House’s, but how that might appear was still taking shape this morning.

An early version being distributed behind the scenes today would have increased the state sales tax to 7.5 percent and reduced the state income tax by an average of 20 percent starting Jan. 1.

But the Republican majority in the Senate said those numbers could change over the course of the afternoon, starting with a 1 p.m. GOP caucus.

Senate President Mitch Carmichael, speaking with reporters, said the most likely structure is an average 15 percent reduction in the personal income tax starting Jan. 1 and then another 5 percent reduction the following year.

“We are trying to do as much as we can with it, prudently,” Carmichael, R-Jackson, said today following the Senate’s floor session.

“You can’t just overnight, wholesale change such a big percentage of your state’s revenue base. So we’re trying to do it in a way that takes a substantive first step and puts us on the path of complete elimination of the income tax.”

The first committee to consider the bill, the Senate’s Select Committee on Tax Reform, was to met this afternoon at 2 p.m. The committee is chaired by Senator Robert Karnes, R-Upshur, who has guided earlier income tax proposals.

The other committee, Senate Finance, is chaired by Senator Mike Hall, R-Putnam, who has generally kept his distance from the income tax reduction proposals that have been considered.

Karnes agreed that the numbers in the Senate’s proposal could change both through this afternoon’s Republican caucus and as the plan makes its way through committee.

“There’s several different options that have been put out there,” Karnes said in an interview after today’s floor session.

“Obviously the Senate has a position, and it’s been a pretty strong position related to what the shape of tax reform is going to look like, and what we do today is going to reflect that position. The precise numbers will probably be something we discuss in caucus.”

The House of Delegates twice voted down versions of the plan the Senate prefers, but Karnes today said he believes significant numbers of Republicans in the House prefer more income tax cuts.

“I’ve already seen House members saying we hope the Senate will go ahead and provide additional tax relief online,” Karnes said. “So I think what the House put out there was not a serious plan and they didn’t consider it to be a serious plan.

“There’s still a certain amount of House leadership standing in opposition to tax relief and tax reform while we’re in this budget crisis. I’m hoping we can convince them to come to the table and be reasonable and convince them that now is exactly the time for tax reform.”

Tim Armstead

Speaking today on MetroNews’ “Talkline,” House Speaker Tim Armstead said delegates remain concerned about aspects of the Senate’s proposals, including the sales tax increase necessary to lower the personal income tax while also balancing the coming fiscal year’s budget.

Commenting on the possibility of a 7.5 percent sales tax, Armstead said “I think they’re moving in the wrong direction.

Armstead, R-Kanawha, added, “I think what the Senate is talking about is going farther in their direction and farther from where we want to be. It makes me less optimistic.”

The House plan passed Friday keeps the sales tax at 6 percent and generally abandons the income tax reductions, although it does exempt veterans’ retirement and Social Security from the state income tax.

The House’s version would remove exemptions for some economic sectors, particularly telecommunications and communications, and raise about $100 million in additional revenue while still leaving a budget gap of about $100 million that would still need to be resolved somehow.

The House passed its revenue bill on Friday with a bipartisan 74-17 vote. Senate Democrats voted against the plan in that house last week.

“I know it’s been portrayed that House Republicans were on an island. But I think now the governor is the outlier,” Armstead said.

Jim Justice

Governor Justice, also appearing on “Talkline” this morning, indicated he still prefers the framework of the plan he’s been negotiating for weeks with Republicans in the Senate.

He said he is concerned that the House’s proposal doesn’t come far enough in balancing the budget this year. He said that bill “still has a significant shortfall.”

Justice continued to endorse both his roads construction proposal and the income tax reduction as potential game-changers.

“We’re standing here with our leg jammed down a crocodile’s mouth. Our state is in terrible shape,” he said.

Republicans in both houses have been pressing for a budget bill to be introduced. It was not among the first bills that were part of the governor’s special session call. The governor said a $4.35 billion-dollar budget proposal is ready to be introduced this afternoon or Tuesday.

The full Senate is to convene again at 9:30 a.m. Tuesday.

The full House is set to reconvene at 4 a.m. Tuesday.





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