With tobacco tax up in smoke, Senate sets sights on sales tax increase

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With tobacco tax up in smoke, Senate sets sights on sales tax increase
By Jeff Jenkins, WV MetroNews

The state Senate Finance Committee began working Tuesday on Gov. Earl Ray Tomblin’s bill to raise the Consumer Sales Tax by one percent in hopes of generating new revenue to fill a budget hole topping $200 million for next fiscal year.

Tuesday marked the 11th day of the special session on the budget. Senators earlier narrowly passed Tomblin’s 45-cent tobacco tax increase bill but it died in the House last week. Instead the House passed a budget on Friday with no new revenue, leaning heavily instead on spending cuts and the state’s Rainy Day fund to balance the 2017 budget.

Several senators predicted Tuesday the House budget bill would be dead on arrival at the governor’s office so it’s better to consider another revenue source. Taking the six percent sales tax to seven percent would fill the revenue gap in the next budget, Senate Finance Committee Chair Mike Hall (R-Putnam) said.

“It would provide for a structurally sound budget going forward and would be something we could build on in the future,” Hall said.

Hall wants the tax increase to be temporary, proposing it sunset in three years. The finance committee will continue discussions at a meeting scheduled for Wednesday morning. It’s projected the one percent increase would bring in $196 million in new revenue next fiscal year and $214 million each of the following two years.

Sen. Minority Leader Jeff Kessler (D-Marshall) made a plea for tax increases during a Tuesday floor speech.

“We need to raise some money! Revenue! Today!”

Sen. Mike Romano (D-Harrison) criticized the Republican leadership for what he called “shuffling papers” between the Senate and the House while not getting much done, but several GOP senators shot back contending they haven’t been stalling.

“We’ve had ongoing conversations and will continue to have them,” Sen. President Bill Cole (R-Mercer) said. “We’re working hard on that end and continue to do so.”

Sen. Majority Leader Mitch Carmichael (R-Jackson) told senators they hope to pass a budget with the sales tax increase plan before the end of the week.

“We are planning to insert the Senate version of the budget into the House bill and then Thursday we will be on final passage. So we don’t belabor our time here any longer than necessary,” Carmichael said.

In the House Tuesday, Gov. Tomblin’s bill that would allow him to furlough state workers in a financial crisis was introduced. It may be considered by the House Judiciary Committee later this week.