Cole says tobacco tax hikes should be revisited as budget hole grows

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Cole says tobacco tax hikes should be revisited as budget hole grows
By Shauna Johnson | WV MetroNews

“Everything needs to be on the table,” says Senate President Bill Cole (R-Mercer, 06), a Republican gubernatorial candidate, ahead of more work for state lawmakers — in a future Special Session — on West Virginia’s 2017 budget.

“I just caution people to never say never as we’re facing some pretty tough times here,” Cole said during an appearance on Wednesday’s MetroNews “Talkline.”

Updated revenue estimates for the coming fiscal year, provided to lawmakers during Tuesday’s Extended Session, reflected a projected shortfall of $92.4 million greater than originally predicted due to continued downturns in global energy markets.

Without the tobacco tax increases Governor Earl Ray Tomblin proposed at the start of the 2016 Regular Legislative Session in January, which accounted for $148 million in new revenues, the 2017 budget hole has grown to an estimated $240 million.

The Senate previously approved tobacco tax hikes that the House later rejected.

In all, projections bring the anticipated budget for the fiscal year that begins on July 1 down to $4.09 billion.

Lawmakers left Charleston Tuesday without approving a budget for the first time since 2009 when federal stimulus dollars were in question, though Cole maintained budget approval had been a possibility.

“We absolutely would have pulled that together and been voting on a budget (Tuesday evening) had it not been for the additional surprise,” Cole said before admitting the budget form most likely to be approved was not one Tomblin would have accepted.

The lead budget bill, the House plan, included more than $30 million from the Rainy Day Fund and another $70 million from the sweeping of state agency accounts.

“A $92.4 million bomb drops in your lap in the 11th hour and there’s nothing that we could have done responsibly,” the Senate President said.

Going forward, Cole said lawmakers will have to be willing to revisit tobacco tax increases, make more reductions to agency budgets, through sweeps and other methods, and tap into the Rainy Day Fund in greater amounts to bring the next state budget into balance.

At the same time, there is a separate budget issue.

Cole said state revenue officials have told him and other lawmakers that the shortfall for the current fiscal year has ballooned to more than $400 million.

“We’re facing extraordinarily difficult times in West Virginia right now,” he said.

In a statement Tuesday, Tomblin said updated revenue figures complicated “an already difficult budget process.”

“I urge all 134 members of the Legislature to come to the table with a willingness to work with my administration to find a responsible solution to be considered later this spring,” the governor wrote.

A Special Session for budget work could be called as early as April.