Budget blues

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Budget blues
Hoppy's Commentary, Hoppy Kercheval host of Talkline

Today is day seven of the special legislative session on the budget and it’s not going well… not well at all.

The tobacco tax increase, which is a critical piece for patching the $270 million hole in next year’s budget, is at passage stage in the House of Delegates later today, but the odds are against it being approved.

The Republican leadership wants it to pass, but is struggling mightily to get 51 votes from its own 64-member caucus. Democratic votes are as scarce as hen’s teeth.  House Speaker Tim Armstead still has about 20 members who have a philosophical and steadfast opposition to any tax increase.

If the tobacco tax increase fails, there’s no new revenue, meaning the entire $270 million will have to be made up with spending cuts, account sweeps and borrowing from the state’s Rainy Day Fund.

Governor Tomblin has provided little wiggle room on Rainy Day.  He’s willing to take some money out of the state’s savings account, which has a current balance of $800 million, but any proposed budget that would dip heavily into Rainy Day—say $100 million or more—would trigger a veto.

There are a couple scenarios being discussed if the tobacco tax bill fails today:

–Tomblin could veto a budget bill that has no new revenue, and then propose a $1-per-pack increase in the tobacco tax, which the Democrats want.  Senate Democrats may be able to pick up a couple of Republicans to get enough votes for passage.  That would be tougher in the House, but by then enough Republicans may be afraid they would be blamed for a shutdown that they would back $1.

–If Tomblin vetoed the budget, Republican leaders could pass essentially the same plan and send it back to the Governor. Tomblin, perhaps unwilling to play budget ping pong with lawmakers, could denounce the budget, but let it go into effect without his signature to avoid a shutdown.

–The budget process could melt down completely, leading to a government shutdown on July 1st.   The public pressure on the Governor and lawmakers to get a budget might be so intense, lawmakers would be forced to adopt a budget quickly, and it would likely include some tax measures.

–Maybe, just maybe, House Republican leaders can strong-arm, cajole, sweet-talk, beg or whatever they have to do to reach 51 votes.  Passing a tobacco tax and combining it with cuts and borrowing from Rainy Day would allow the GOP to argue it has taken a balanced approach to solving the budget problem next year.

No, time isn’t running out yet—we still have until the end of June—but something has to give.