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West Virginia Legislative Leaders Comment On Budget Approach

March 13th, 2017 by WCBC Radio

West Virginia's legislative leaders issued a press release on the state budget today:

House Speaker Tim Armstead, R-Kanawha, and Senate President Mitch Carmichael, R-Jackson, today unveiled the Legislature’s approach to balance the state’s budget by controlling government spending and avoiding massive tax increases on struggling West Virginians.

“This Legislature was elected to take our state in a new direction and create jobs,” President Carmichael said. “Passing the largest tax increase in West Virginia history to fund hundreds of millions of dollars of new government spending is not the approach the people want. They want us to get government spending under control.”

“We fully intend to pass a balanced budget that controls spending while facing the reality that our state government needs to live within its means,” Speaker Armstead said. “The ‘War on Coal’ over the past eight years has severely damaged our economy, cost thousands of jobs and slashed incomes for working families across the state. Our budget must reflect these challenges, not exacerbate them.”

Gov. Jim Justice’s administration has projected the state will collect $4.05 billion for the General Revenue Fund in the coming fiscal year, which begins July 1. Yet the Governor has proposed a budget that would spend $4.5 billion – spending mainly backed by the largest tax increase in state history.

Rather than basing a budget around what government wants to spend, Speaker Armstead and President Carmichael believe the budget should be based on what government expects to collect from its people, rather than asking them to pay additional taxes to fuel more spending. The budget framework lawmakers introduced today is designed with this approach in mind.

To balance the budget at the initial $4.05 billion revenue estimate, lawmakers propose the following changes to Gov. Justice’s introduced budget bill:

  • Elimination of the “Save Our State” Fund, saving $105.5 million
  • Implement “Smoothing” in Teachers’ Retirement System, saving $43.2 million
  • Continue 2-percent mid-year cuts implemented by former Gov. Earl Ray Tomblin; saving $21.9 million
  • Not including Gov. Justice’s proposed 2-percent teacher pay increase; saving $21 million
  • Eliminating greyhound subsidies; saving $15 million
  • End the casino modernization subsidy; saving $9 million
  • Foregoing Gov. Justice’s $5.6 million tourism advertising increase
  • Redirecting a $38.3 million transfer for the Workers’ Compensation Fund
  • Redirecting a $30.9 million General Revenue/Lottery Surplus transfer
  • Foregoing a General Revenue transfer to the Division of Highways; saving $11.7 million
  • Accepting a $2.8 million increase to the beer barrel tax (from $5.50 to $8.00)
  • Recognizing a wholesale liquor increase from 28 percent to 32 percent (does not require legislation)

These changes will leave a roughly $150 million spending-to-revenue gap, which lawmakers will eliminate by prioritizing spending in other areas of the budget. Those gap-closing measures will be implemented throughout the course of the normal budget process in the House and Senate’s Finance committees.

“These actions will be difficult, but we owe it to our citizens to do everything we can to make their government run more efficiently without constantly asking for more money from taxpayers,” Speaker Armstead said. “Our citizens have asked us to make tough choices to get government growth under control, and this budget will do just that.”

“We fully intend to have this budget passed and onto the Governor’s desk before our 60-day session ends April 8,” President Carmichael said. “The days of spending more than we can afford are over. It’s time for our government to live within its means, and this budget approach will accomplish that.” 

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