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Governor Justice says budget plan was ‘at the altar,’ plans to take case right to GOP

CHARLESTON, W.Va. — Gov. Jim Justice said his administration was “right at the altar” with Republicans in the House of Delegates on a state budget framework on Wednesday, and he intends to meet with the Republican caucus this afternoon to try to push the budget deal to the finish.

Justice gave an update this morning in the governor’s conference room. Several legislative Democrats attended. Justice then appeared on MetroNews’ “Talkline.”

The governor said his administration couldn’t quite reach an agreement with Republicans in the House over about $45 million in remaining revenue that needed to be built into the budget. His chief of staff, Nick Casey, met several times over the course of the afternoon with House GOP leaders and also with House Democrats.

“The net-net of the whole thing is just this: We got right to the altar and couldn’t make a decision. I mean, right to the altar,” Justice said today.

He said Republicans were offered two choices: a) raise the state sales tax by half a penny or a quarter of a penny or b) increase the state tobacco tax and institute a tax on sugary drinks. But Justice contended that after a full afternoon of talks, Republicans remained reluctant to pull the  trigger.

“We needed to go to a vote,” Justice said.

In recent days, the governor and his staff have begun negotiating with House Republicans and Democrats over a budget framework. The Senate has largely been outside those negotiations.

Tim Armstead

House Speaker Tim Armstead has said any additional revenue to balance the budget needs to fit within a philosophy of “broaden the base, lower the rate.”

“What we’re interested in is this broadform tax reform that actually ends up lowering the rate on the sales tax so that everybody that goes to Walmart or wherever will have a tax break because there will be a larger group that that tax gets spread out on,” Armstead, R-Kanawha, said this morning during his own appearance on “Talkline.”

“What we’re really trying to get to is to start taking the total sales tax on everything, everything you buy, take it down from six percent down to 5.5 and then five and then keep going down (from there).”

A tax reform proposal that House GOP leaders chose not to advance by a Wednesday deadline would have lifted exemptions to the sales tax, lowered that sales tax to five percent and implemented a food tax of three percent.

A tax bill had already passed out of the Senate earlier Wednesday and House leaders believed they could amend and adjust that bill rather than voting on their own version.

It’s the decision to note vote on the House’s own amended version of that tax reform bill that had the governor fired up today.

In general, the Senate tax reform plan, SB 409, approved in the Senate with a 22-12 vote Wednesday and sent to the House would raise the sales tax by one percent, eliminate many current tax exemptions, return the food tax at 3.5 percent and create three income tax brackets as a first toward eliminating the income tax.

Armstead said tax reform negotiations, as part of ongoing budget work with the Senate and the Justice Administration, were focused on individual “components” and, as of Thursday morning, no agreement had been reached, Armstead said.

“The part that needs to be kept in mind is the governor is still looking at tax increases that we just can’t go with,” he said from the “Talkline” set at the state Capitol.

He said any support from him for a new food tax was conditional.

“Only if it’s part of this ‘broaden the base, lower the rate’ where, ultimately, everything else goes down,” he said.  “The only way that I would go back to putting some of that in is if it is the pathway to get to a lower sales tax for everything.”

Negotiations about sales tax exemption eliminations were reportedly focused on “direct use” items like those in manufacturing, transportation, transmission, mineral resources production and communications for $50 million in new revenues.

“We’re not talking about totally closing out that exemption (fully), but there may be aspects of it we could close out that would ultimately make it more fair and be able to shift that $50 million that would come in to helping lower that rate for everybody,” Armstead said.

Justice — and Casey — said today that the administration is fine with the “direct use” tax component of a budget outline. Casey likened it to a sales tax for business.

Tim Miley

House Minority Leader Tim Miley on Wednesday evening said Democrats hadn’t had enough time to process the ramifications of eliminating the exemptions on “direct use” items.

“I think talks are still ongoing. It’s just hard to make snap decisions when things are brought up at the 11th hour,” Miley said.

He said the focus was on “direct-use” exemptions for businesses areas like transportation and communications. But what he heard was not well enough defined.

“I don’t know what that means,” Miley said Wednesday. “How’s communications defined? How’s transportation defined?”

​The last day of the session is Saturday, Apr. 8.

Shauna Johnson and Hoppy Kercheval contributed to this story.





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