CHARLESTON, W.Va. — Just days ahead of the end of the 2016 Regular Legislative Session, separate proposed budgets for Fiscal Year 2017 in West Virginia could get votes Tuesday from members of both the Senate Finance Committee and the House Finance Committee.
House Finance Committee Chair Eric Nelson (R-Kanawha, 35) said the House’s version of the $4.6 billion spending plan would likely include additional line item budget cuts, the expiration of special revenue accounts and a dip into the Rainy Day Fund of no more than $100 million.
“It’ll be a balanced one,” said Nelson when asked about the potential final look of the House budget on Monday’s MetroNews “Talkline.”
“I’m just hoping we have a lot of good debate back and forth, positive debate and discussion about where we need to be.”
The new fiscal year begins on July 1.
A balanced budget is a state law requirement and, in the coming year, the West Virginia budget shortfall is estimated at between $160 million and $180 million. There is currently $850 million available in the Rainy Day Fund, what Nelson repeatedly referred to as “revenue surplus.”
Governor Earl Ray Tomblin’s proposals for new revenue sources — a telecommunications tax and higher tobacco taxes — are no longer on the table at the State House. The telecommunications tax had little support from the start.
Nelson’s committee, the House Finance Committee, rejected the tobacco tax increases, including a 45 cent tax increase on every pack of cigarettes, last week. Part of the blame for that, he said, falls on Tomblin.
“The support was not there. The push from the executive branch was not there. It needed bipartisan support and we were the furthest thing away from any bipartisan support of trying to pass that,” Nelson said.
A House Republican proposal to remove the sales tax exemption on professional services, such as those provided by lawyers, accountants, engineers and media advertising, while lowering the sales tax from six percent to 5.5 percent was also tabled.
The 2016 Regular Session closes on Saturday night followed by an expected Extended Session, possibly lasting into next week, dedicated solely to budget work.
As mandated, Nelson predicted lawmakers would submit some form of a budget to Gov. Tomblin within roughly the next week, but he said a much closer, more extensive look at the budget should follow between now and the end of 2016.
“I’m in a camp that we can’t necessarily look at these reductions overnight,” Nelson said.
“It’s a time process, looking at how should state government operate going forward. Do we need some of these agencies? Could there be some consolidation? Should we look at a public-private partnerships for our state parks?”
Those questions, he said, require input and leadership from the executive branch of state government.
During the last three fiscal years, budget reductions for many state agencies have totaled 19 percent.
The shortfall for the current 2016 Fiscal Year is estimated at $354 million, though state revenue officials said that number was “trending upwards” following another down month for revenue collections in February.
State officials have said that shortfall developed quickly, mostly because of a “significant decline” in severance tax collections due to lower energy prices.