House Finance Chairman Vernon Criss says the budget passed during the most recent legislative session achieves a balance.
On Day 59 of the regular legislative session, the House of Delegates completed work on a $4.87 billion general revenue budget that includes provisions for pay raises and tax cuts while also making adjustments on insurance for public employees.
“Obviously it’s a three-legged stool on the budget process,” Criss, R-Wood, said in an interview on the House floor on Day 60. He noted that the House and Senate work concurrently on their own financial priorities before coming together in the final days of the session.
The final step is sending the budget to the governor, whose representatives have usually been involved all along.
“With his cooperation, we were able to do the things for PEIA, the pay raise, the tax cut, that were either signed into law or are getting to be signed into law, so I think we’ve come away with a big success with this legislative session as far as the finances are concerned.
Much of the legislative session was consumed with a back-and-forth over the best format the tax cut that Republican majorities and the governor all wanted.
Early in the regular legislative session, the governor and the House majority advocated for a straight 50 percent income tax reduction over three years. Early on, senators advocated for a more cautious, broader approach — with Senate leaders and the governor demonstrating particular friction for a while.
The entire process concluded, as celebratory balloons dropped, with the governor signing a broad-based tax cut bill highlighted by a $21.23 percent income tax cut along with personal property tax breaks affecting people’s vehicles and small businesses.
State officials have estimated the overall financial impact of the tax bill is $695 million in fiscal 2024 and $817.8 million upon full implementation.
“This business is compromise,” Criss said, “and you take components of both sides and try to meld them together into a situation where you can walk away with a win on both sides — and I think that’s what we did as far as a tax cut is concerned.”
Delegate John Williams, D-Monongalia, serves on the Finance Committee and voted in favor of the general revenue budget for the coming fiscal year. But Williams said he has concerns on down the line.
“I think in the short term, it certainly achieves the balance they’re seeking,” Williams said in the hallway outside the House chamber. “I think things are well-funded compared to years past, and we are not seeing cuts.
“My concern lies with the bills we passed this session, the effects they will have on other budgets in future years. So will we be able to maintain this type of funding, and my concern is that the answer to that question is no.”
Right now, West Virginia is running a budget surplus of hundreds of millions of dollars. But that’s based on several factors, including high energy prices that have produced high-performing severance tax returns and the likely stimulus of federal dollars. Revenue projections have also been held artificially low, keeping the base budget under control but leading to more reliance on surplus spending.
“Every time we pass a budget, we take into account legislative action that’s going to reduce income to fund that budget. And the numbers work this year, and that’s fantastic. But future years, I don’t think that they will work. And there are a lot of things in this budget that I care about that are funded this year. I’m worried about what are we going to do in three, four years when we don’t have the money.”
Kelly Allen, executive director of the West Virginia Center on Budget & Policy, agreed that some of the financial steps made by state leaders this year may be challenging to reconcile in the future.
“The budget passed this year is about $550 million less than our last pre-pandemic budget in fiscal 2019 after adjusting for inflation,” Allen said around the well at the Capitol Rotunda. “So that essentially means we’re able to do $500 million less worth of things than we were able to do back then.”
So that could mean being stretched thin on policy choices like enhancing childcare subsidies, putting more state money toward insurance benefits for public employees and putting more toward higher education.
“And we think those are all things that would move the state forward and help the economy,” she said. “But it seems like bills with fiscal impacts were de-prioritized because the top priority for the session was tax cuts.”