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WV Lawmakers Make Progress on Needed Revenue

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Monday, May 22, 2017   

CHARLESTON, W.Va. -- The West Virginia Legislature is getting closer to securing the revenue the state needs. But Ted Boettner, executive director with the West Virginia Center on Budget and Policy, says lawmakers aren't there yet.

Bills have passed in the House and Senate that would increase state revenue by as much as $150 million, mostly through raising and expanding the sales tax. But Boettner said they're still $100 million short for this fiscal year - and even more for next year.

"There is a tremendous amount of unfinished business. If they don't address it this year, it's highly unlikely they will next year during an election year,” Boettner said. "And at that point you're going to talk about major cuts to Medicaid, closing down several universities."

Boettner said next year's shortfall could be $140 million, depending on new revenue forecasts due this week. Some lawmakers have called for many more cuts to balance the budget. But Boettner noted that after years of budget tightening, even the Legislature has been unable to come up with enough politically viable cuts to close the gap.

Lawmakers are due back in Charleston on Tuesday.

With the revenue bills that look likely to pass, the state's budget crisis seems to be approaching a more manageable level. And Boettner said he's pleased the House is firmly opposed to what he called the "foolish plan" to phase out the state income tax when the state is running in the red.

Senate leaders had argued that enough revenue would come from additional growth sparked by the tax cuts to make up for the losses. But Boettner said House leaders recognized that as a false hope.

"Fortunately, the House rejected the Senate's offer to cut the income tax by 20 percent and repeal it. The House would like to instead focus on the sales tax,” he said.

The West Virginia Center on Budget and Policy has long argued that the state should raise the taxes on tobacco and sugary drinks. But Boettner said that doesn't seem likely now.

"But when it comes to soda and cigarettes, unfortunately they haven't looked upon those again to raise,” he said. "But that would be a step in the right direction that would not only bring in revenue, but also improve our state's health."

The governor has yet to add the budget to the list of items that can be discussed during the current special session. Right now, discussions are limited to the revenue side.

More information is available at WVPolicy.org.




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