'Long shot' 1% hike in the sales tax mulled

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'Long shot' 1% hike in the sales tax mulled
By Phil Kabler, The Charleston Gazette-Mail

With a state government shutdown looming a month away, West Virginia’s Senate Finance Committee spent Tuesday on a long-shot attempt to resurrect a 1 percent increase in the consumer sales tax.

“I don’t know if it’s a Hail Mary, but it’s definitely a long pass,” Senate Finance Chairman Mike Hall, R-Putnam, said of the efforts to bring back a bill (SB 1003) that was immediately quashed by House and Senate leaders when the special session began on May 16.

The bill was one of three revenue measures proposed by Gov. Earl Ray Tomblin. Senate leaders brought it back after the defeat last week of a tobacco tax increase in the House of Delegates, and with the likelihood Tomblin will veto the Legislature’s current 2016-17 budget plan — which heavily raids the state’s Rainy Day emergency reserve funds to close a $270 million budget shortfall.

Hall said he’s playing a hunch that voters would be more tolerant of a small, broad-based tax increase that affects all consumers, as opposed to the tobacco tax, which imposes a steep increase on a portion of Mountain State citizens.

“This seems to be at the top of the list of the man on the street trying to counsel us on what to do,” Hall said.

A temporary 1 percent increase in the sales tax also would go further in closing the budget shortfall than the tobacco tax, raising $196 million in the 2016-17 budget year, and $214 million for each of the next two fiscal years, according to state Tax Department estimates.

Meanwhile, state Budget Office Director Mike McKown warned committee members that using Rainy Day and one-time funds to close the 2016-17 budget shortfall will only exacerbate future shortfalls, creating budget gaps of at least $380 million in fiscal 2018 and 2019.

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