CHARLESTON, W.Va. — Gov. Jim Justice says his revenue plan that would increase the sales tax but offer a break on income taxes is still his preference, even after the state Senate abandoned the plan and passed a budget with cuts to higher education and Medicaid.
Justice was doing a series of interviews today with West Virginia media outlets from his office at the state Capitol.
In a 20-minute discussion with MetroNews, Justice describes serious concerns over the cuts represented in the budget passed by the Senate, his desire to go back to his preferred plan that includes income tax cuts, the divide between himself and his fellow Democrats in the Legislature and an extended “Old Man in the Sea” analogy in which Justice is the old man straining to reel his $4.35 billion budget proposal into the boat.
The state Senate, in a Tuesday evening party-line vote, passed a $4.225 billion budget, using all of the current revenue estimate. The bill abandons the desire by Senate Republicans to offer income tax reductions as part of an overall revenue bill.
Instead the Senate bill makes up ground by cutting $33 million in state funding from the higher education system and $34 million in Medicaid funding. The Medicaid funding is subject to a 3-to-1 federal match, so that’s a $136 million overall cut to available healthcare funding.
“It’s not good,” Justice said today. “At the end of the day I tried to warn people that this was coming. I warned them.”
Earlier this week, Justice was pushing a variation on his own plan, which would have raised the sales tax July 1 while reducing personal income taxes by an average 7 percent on Jan. 1, 2018, followed by later triggered reductions.
The lag time between the sales tax going up and the income tax going down would have provided additional revenue for the coming year’s budget. Justice early this week suggested wages above $300,000 should not get a break.
“We had it done,” Justice said, saying that if Democrats in the House and Senate had agreed to the plan then it could have passed. “If the Dems would have come with me, we had it done.”
That’s when the governor launched into his extended “Old Man and the Sea” reference, laying blame on his fellow Democrats:
“The guy worked awfully hard, and if you can think the old man is me — he worked hours through the night and finally had the fish all the way to the boat. The fish was the Republicans and I had ’em all the way to the boat. And on the boat I had the Democrats.
“And when I got the fish all the way to the boat I was tired, I was really tired, sweat running all over me. And the Democrats came over and not only did they cut the line of the fish, they pushed the fish back out into the sea.”
Democrats and House Republicans were critical of the income tax reductions for several reasons.
One is doubt that the state can handle cuts when it’s already struggling with the budget. Another is the other taxes having to be raised to contend with the income tax cuts. And, finally, the concern that lower- and middle-class wage earners would be particularly vulnerable to having their income tax reductions swamped by increases in the other taxes.
The criticism goes both ways too. Explaining the difficulties in coming up with a budget today in this morning’s House of Delegates floor session, Finance Chairman Eric Nelson said, “A lot of this I lay at the foot of the executive.”