CHARLESTON, W.Va. — Gov. Jim Justice was spending his day going back and forth among four rooms — with the state Senate president, the House speaker, the Senate minority leader and the House minority leader in each.
Although Justice has been an advocate for unsettled policy points such as increased funding for state roads and a decrease in the state income tax, in this case he says he is acting as the “mediator-in-chief.”
An announcement sent out Wednesday night from the administration stated, “Governor Justice will meet with the Senate President, the Senate Minority Leader, the Speaker of the House, and the House Minority Leader in four separate rooms and travel from room to room as the mediator-in-chief. Justice wants to better understand the positions of each side.”
The negotiations started at 10 a.m. today, with the governor gathering with teams from each party and each house in the Governor’s Conference Room. That meeting, which included assorted donuts from Krispy Kreme, lasted only about half an hour and then the different groups went off to find their negotiating rooms.
The governor began by spending 15 or 20 minutes with Senate Republicans. He then joined House Democrats for more than an hour. Justice had joined House Republicans by 1 and then started a meeting with Senate Democrats about 2:15.
As the governor talked with each group, the other groups had little to do but wait in their rooms. Each group did exit for a break at the Governor’s Mansion for a lunch spread that included cold cuts, chicken tenders and potato salad.
Those in the first meetings said the governor described his experiences negotiating with CSX, the former owner of The Greenbrier, when Justice purchased West Virginia’s historic hotel property. The Greenbrier was at the brink of bankruptcy, so the point was that state leaders need to negotiate in good faith to save the state from fiscal disaster.
Negotiators privately said the governor continued to express support for the income tax reduction and the roads plan and spent significant time doing so. But they said Justice also seemed genuinely interested in listening to their positions.
During the breaks, Senate President Mitch Carmichael issued a statement through a release distributed by his office. It urged continued consideration of the income tax reduction.
It began, “Senate President Mitch Carmichael, R-Jackson, stressed the importance of giving the Senate’s tax reform plan full and fair consideration as leadership from the House of Delegates and the Senate met today with the Governor.”
The parties meeting today included not just Carmichael, House Speaker Tim Armstead, House Minority Leader Tim Miley and Senate Minority Leader Roman Prezioso but also other lawmakers who would, essentially, be forming bargaining units.
— MetroNews (@WVMetroNews) May 25, 2017
This is an unorthodox move, both for state government and in the sense that one of the negotiators has cast himself as the chief mediator, but this has been an unorthodox governor.
Justice stated in the release, “I want to get this budget deal done, and a mediation session will hopefully help us get there. We are all West Virginians and we all want a path forward that will help our people. Rarely has West Virginia had this opportunity in the midst of a terrible crisis; we don’t want to lose this moment.”
Besides the budget, Justice’s attention is focused on his proposal to pump millions of dollars into highway and bridge work. Bills aimed at those goals passed the Senate on Wednesday evening on three straight votes but were still parked in the House’s Finance Committee.
The latest attempt to jumpstart talks came after two broadly different votes in the House of Delegates and Senate on Wednesday evening.
Republicans in the Senate voted, with the exception of Senator Randy Smith, in favor of a revenue plan that would raise the state sales tax from 6 to 7.25 percent while lowering the personal income tax by an average 20 percent over two years.
That would solve the budget gap this year by raising the sales tax six months prior to lowering the income tax, but it’s projected to result in deficits in the coming years.
Democrats in the Senate voted against the plan, worrying about later deficits and arguing the tax structure change would hurt the lower- and middle-class.
All 85 members of the House who were here Thursday night, regardless of party, voted to refuse to consent to the Senate’s bill.
The House has favored a plan to keep the sales tax the same and forego the broadest aspects of the income tax changes in favor of extending the sales tax to economic sectors such as telecommunications and communications.
The House plan would exempt sales tax for veterans retirement and Social Security income — as would the most recent version of the Senate plan.
The House plan is estimated to raise an additional $100 million in revenue for the coming fiscal year but still potentially stop another $100 million short of Governor Justice’s preferred $4.35 billion budget proposal. More revenue of some kind — or more cuts — would remain necessary.
Those votes seemed to position Governor Justice and Senate President Carmichael on one side, with House Speaker Armstead, House Minority Leader Miley and Senate Minority Leader Prezioso on the other.
Negotiations meant to resolve a gap of about $200 million in the state budget have taken a variety of formats over the past few months.
At one point during the regular legislative session, the governor established a “war room” by his office where he invited elected leaders to come and discuss budget strategy. Only Democrats and some members of the Liberty Caucus of the Republican Party participated.
There were other meetings, including some breakfast gatherings, among leaders — but even Justice described those as fruitless.
Back on March 21, Justice gave a lengthy account of his frustration over those meetings.
“Last Monday we had breakfast with the leadership and we talked and everybody said ‘Well, let’s come back this week,’ and we came back last Friday. I left my home in Lewisburg at 5 o’clock in the morning to have breakfast with ‘em and everything.
“Nick Casey (the governor’s chief of staff) said ‘They’re going to come with real ideas and we’re going to get somewhere.’ You know what we got done? Sweet rolls, bacon, eggs. We got nothing done. Nothing and I told ‘em. I said, ‘Listen here, I don’t need to be up at 5 o’clock in the morning and come down here for nothing. If I’m going to get up at 5 o’clock in the morning, I’m going to go turkey hunting if this is what we’re going to do.’
The governor concluded, “Really and truly, we sat right here and did nothing.”
During the time leading up to the special session and during some special session hiatuses, the governor met with leaders. But Armstead first described being frosted out of those meetings and later Democrats said they were left out.
Armstead on Wednesday night, before he learned he would be isolated in a room today, described increased optimism over the budget talks.
“It shouldn’t be and it has become in too many ways a power struggle,” said Armstead, R-Kanawha.
“I’m hoping what happens from this day forward is that we’re looking more at where we agree rather than where we disagree. Let’s start with a common theme of what we will agree on rather than I don’t like this plan or I don’t like that plan.”
Armstead said the votes in the Legislature have made it clear that some options should come off the table.
“It is very clear that portions of the plan as proposed by the governor and the Senate are not going to pass the Legislature,” he said. “The support is going in the other direction. They’re losing support rather than gaining it.
“Let’s look at ways we can find a path forward that will gain the support of the House Republicans and Democrats and the Senate Republicans and Democrats, that the governor can sign. That’s our goal.”
At points during the regular session and early in the special session, Democrats of both houses were making public appearances in support of the governor, sometimes standing behind Justice as he spoke to the media.
That changed when all the Democrats in the Senate broke against the proposal negotiated between the governor and Republicans in the Senate last week. Prezioso has been careful to say his caucus supports much of the governor’s agenda, including the roads plan, but can’t support the income tax changes if they’re accompanied by a significant sales tax increase.
Prezioso, D-Marion, told West Virginia Public Broadcasting this week that his caucus has common ground with Republicans in the House during recent votes on tax bills. At the time, Prezioso believed the process was headed toward conference committee.
“Obviously, they’ve got some sentiment from House Democrats and from Senate Democrats so now they’re gaining some allies,” Prezioso said.
“So if we can get the coalition together and work out a plan that we can embrace, I think we can get out of here with minimal damage.”
Carmichael and his Republican caucus have consistently said they believe the income tax changes would be a game-changer, resulting in greater economic growth for the state. On Wednesday, Carmichael expressed frustration that it’s been difficult to persuade the other caucuses.
“You get in these discussions and people say ‘I’m worried or I think this might be bad or how’s this going to work out for West Virginia,'” said Carmichael, R-Jackson.
“You’re watching a race and the person in last is thinking ‘I don’t want to change my shoes or my style or my gait. I just want to keep doing what I’ve been doing and maybe I’ll win. But at the end of the day, you have to change. So that’s what we’re trying to do with this plan.”