March 10, 2017
CHARLESTON, W.Va. – The House of Delegates this week wrapped up its budget hearing process with state agencies, setting the stage for establishing a spending framework for the Fiscal Year 2018 budget bill.
The budget bill for the upcoming fiscal year, which begins July 1, has presented lawmakers with a significant challenge this session. The spending plan proposed by Gov. Jim Justice – House Bill 2018 – features a roughly $450 million gap between the Governor’s requested expenditures and the revenue his administration expects to receive under the state’s current tax structure.
House Speaker Tim Armstead, R-Kanawha, and the Republican caucus have been critical of the Governor’s proposed budget, which increases spending by $318 million compared to the current fiscal year despite the fact tax revenues are expected to decline due to the state’s contracting economy. The Governor has proposed closing this gap with what amounts to the largest tax increase in West Virginia history.
Speaker Armstead and his leadership team have been working to build consensus around an alternative to the Governor’s plan and, now that the budget hearing process is complete, hope to unveil a framework for this alternative in the coming week.
“House leadership plans to pass a balanced budget that controls government spending while facing the reality that our state government needs to live within its means,” Speaker Armstead said. “The days of raising taxes to support massive increases in spending are over. The people of West Virginia are tired of seeing their government grow every year while their own incomes are shrinking.”
Thursday marked the halfway point of the 60-day regular session. The Finance Committee completed its budget hearings on Friday with the Public Service Commission and Consumer Advocate Division. Other agencies they heard from this week included the state Treasurer, Attorney General, Secretary of State, School Building Authority, and Department of Education and the Arts.
The Finance Committee has held 26 hearings with various offices and state agencies since the session began Feb. 8. Finance Committee Chairman Eric Nelson, R-Kanawha, said that while the budget hearing process takes time, it is vitally important to crafting a budget – especially when state finances are so challenged.
“The Governor has proposed spending $4.5 billion, despite revenue projections saying we were only going to collect $4.05 billion under our current tax structure,” Chairman Nelson said. “It is our job as a Legislature to hold the executive branch accountable with its spending. That’s why the first month of the session for the Finance Committee is dedicated to holding hearings with the various state agencies to justify their spending requests.
“This process is important, particularly when times are tight,” Chairman Nelson said. “We’re using these hearings to find out if these agencies truly need the full amount of dollars they’ve requested, and whether we can find any efficiencies in their operations. Only after fully vetting these proposals, and making any adjustments to proposed spending we can find, will we begin to consider any revenue alternatives to close our budget gap.”
Chairman Nelson has broken up the Finance Committee into 14 bipartisan work groups, consisting of two to five delegates each, to fully analyze all spending and services at state agencies. These work groups investigated the budget requests of their assigned agencies and are in the process of recommending changes to save taxpayer money.
“Our Finance Committee work groups have been scouring these agency budget proposals to find any savings and efficiencies,” said Finance Committee Vice Chairman Eric Householder, R-Berkeley. “Through our budget hearing process and the work we’ve done independently following those hearings, I believe we’ve found several areas of cuts that could save taxpayers tens of millions of dollars.”
Meanwhile, the Governor has been critical of the Legislature’s deliberate pace. Despite the fact the Finance Committee historically does not approve a budget plan until the final week of session – something purposefully done to account for any bills passed that affect spending or revenue for the state – the first-year Governor called a press conference Thursday claiming lawmakers should already have presented a budget by then, the 30th day of the legislative session.
“The Governor has suggested we should have already had a budget out by day 30, which clearly disregards the importance of this process,” said Majority Leader Daryl Cowles, R-Morgan, who is also a member of the Finance Committee.
“It is our duty as legislators to make sure taxpayer dollars are being spent wisely and in the most efficient manner possible – that is why these budget hearings are so important,” Majority Leader Cowles said. “For the Governor to suggest we should simply bypass this process to rubber stamp his spending plan completely disregards our Constitution and the taxpayers we represent.”
Meanwhile, the House Liberty Caucus announced this week it has crafted its own alternative to the Governor’s budget proposal.
House Bill 2908, formally introduced Friday, would reduce state spending by $84 million compared to the current fiscal year, cutting roughly $402 million from the Governor’s proposed budget.
Delegates Pat McGeehan, R-Hancock, and Michael Folk, R-Berkeley, co-sponsors of the budget bill, said it was designed to reduce and halt the growth of government in Charleston without further burdening state residents with increased taxation.
Despite cutting spending, the Liberty Caucus plan would still provide teachers with a 2-percent pay raise while fully preserving the state’s Promise Scholarship funding.
“While this is not a perfect budget, we believe it is a rational approach to balancing the state government’s checkbook in difficult economic times,” Delegate McGeehan said. “We carefully took into account concerns from different delegates in both political parties, because we knew this bill needed to be bipartisan. At the end of the day we all agreed that this is the right thing to do, since so many of our residents are just trying to make ends meet.”
The Liberty Caucus budget bill has been referred to the Committee on Finance for further consideration.