CHARLESTON, W.Va. (AP) - Democratic Gov. Jim Justice is allowing the budget passed by the Republican-controlled West Virginia Legislature to take effect, but he won’t sign it. He says the cuts go too deep.
“I’m not going to put my name on this mess,” Justice said Wednesday. But state workers and retirees already face too much uncertainty to make them deal with a government shutdown that might have followed a veto, he said.
Both the House and Senate approved the $4.225 billion general revenue budget on Friday, but they failed to resolve an impasse over tax changes that would have raised revenue and limited budget cuts for the fiscal year that starts July 1.
The budget reduces support for state colleges and universities and provides no raises for public school teachers, which Justice wanted to help fill the 718 teacher vacancies statewide. It also won’t help the struggling coal industry, or provide income-tax cuts and rebate checks for the poor, he said.
The budget doesn’t include a proposal by Justice to establish tiered severance taxes that would have lowered rates for coal from thin seams below the current 5 percent, and let all severance tax rates rise and fall with market prices.
An owner of coal companies, he said it would help keep some marginal operators open and bring the state a windfall if prices go high.
Overall, the budget contains $130 million more in funding cuts than the $56 million he proposed, the first-term governor said. It’s also backfilling Medicaid funding with uncertain revenue and failing to fix structural problems that will cause budget deficits to grow in future years, he said.
The legislature did pass the governor’s proposal for highway reconstruction, which he said will put thousands of people to work on almost 500 road projects. To pay for it, the state will raise the variable minimum wholesale gas tax by 3.5 cents a gallon and the vehicle sales tax from 5 to 6 percent while raising various state motor vehicle fees. Voters will decide in a referendum later this year whether to approve bonding for an even larger program.
The budget also assumes tax revenues will total $129 million more next year than the projection in the $4.1 billion budget the Legislature passed and governor vetoed two months ago. That’s mainly based on recent increases in natural gas and coal prices and production, as well as state economic growth tagged in part to the highways program.
The governor said many of the legislators he called back into a special session for the budget are to blame for the pain many people will suffer.
“Too many people are here to get re-elected,” Justice said. “The House leadership is surely, surely questionable on both sides.”
The final budget that passed with votes of 19-8 in the Senate and 64-25 in the House left a series of revenue-raising and tax-cutting proposals by the wayside.
The House had approved a tax plan to broaden the sales tax to cellphone service and digital products, but leave the tax rate at 6 percent. It would have added an estimated $67 million in additional tax receipts. It would also have exempted military retirement pay from income taxes and Social Security for residents with annual incomes less than $100,000. It would also increase those earners’ personal exemptions by $500, to $2,500.
The Senate had voted for Justice-supported tax legislation that in various versions would have raised the sales tax to 6.3 percent or more, cut income tax rates by 5 percent or more and established tiered coal tax rates. The Senate bill also would have exempted military retirement pay and most Social Security benefits.
Senate President Mitch Carmichael responded Wednesday that the budget responsibly puts no additional tax burden on West Virginians, and spends about $85 million less overall than last year. In the future, he said they’ll have to keep cutting programs and services or pass tax reforms.
House Speaker Tim Armstead said the budget requires the government to live within its means with necessary cuts and isn’t “the disaster scenario” Justice suggests. It protects Medicaid and health care for the poorest West Virginians, saves funding for public education, and he says the cuts for higher education are far less than originally proposed.
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