Commentary: West Virginia Budget 3.0

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Hoppy's Commentary: West Virginia Budget 3.0
By Hoppy Kercheval, WV MetroNews

Governor Tomblin will pull out his veto pen this week for the budget plan sent to him by the Republican majorities in the Senate and House of Delegates.  Chris Stadelman, Tomblin’s Director of Communications, left no doubt in an interview on Talkline last Friday that Tomblin would trash the document.

“It’s completely unworkable,” said Stadelman.  “It’s an irresponsible plan and it’s not one that the Governor can support.”

Tomblin had said all during the special session that a deep draw from the Rainy Day Fund to close the $270 million dollar hole in the FY 2017 budget was a non-starter.  The Republican budget plan that uses about $240 million in one-time money, including $182 million from the Rainy Day Fund, never had a chance.

Tomblin gave lawmakers several proposals for tax increases during the special session, but none passed. Now the Governor plans to submit an entirely new budget.

He’s expected to include additional revenue from a tax increase–likely a cigarette tax hike of at least .65 cents per pack–more cuts in state spending and a withdrawal from Rainy Day that’s higher than he wants, but far lower than the Republican budget proposal.

Let’s call this West Virginia Budget 3.0… or maybe it’s 4.0.  I’m starting to lose count.

Then the work begins again. Since it will be Tomblin’s budget, he should be expected to take the lead to try to get it through the Legislature. That won’t be easy. Legislators left the capital last week an angry, frustrated bunch, distrustful and disgusted with many of their fellow lawmakers.

The biggest challenge will be the same as it has been all along–getting the disparate members of the House to agree on a tax increase.  There is no consensus in either the Republican or Democratic caucuses on the cigarette tax, with views ranging from no increase at all to a hike of at least $1.

The wide ranging opinions are understandable, and trying to bend the will of someone with a convicted position is a tricky tack.  However, it is essential that at least 51 of the 100 members of the House (and preferably more) take a pragmatic approach to finding an additional source for a substantial amount of revenue.

For weeks, Republican leaders prioritized spending reductions ahead of tax increases, but they struggled to find even $30 to $40 million in cuts (depending on how the cuts are categorized).  Nearly all budget items have a constituency group or a group of lawmakers who support that spending, making significant cuts problematic.

The Rainy Day Fund has a balance of about $800 million, but draining it by nearly 25 percent would be risky. The state credit rating would likely suffer and, perhaps more importantly, the use of one-time money from savings for the FY 2017 budget automatically leaves a hole in the FY 2018 budget. That’s why new revenue is a critical part of the equation.

Since the Tomblin administration says the Republican plan is unworkable, it’s now up to the Governor to roll out a workable budget, and then use the political acumen he’s accrued from a lifetime at the statehouse to corral the votes necessary.