A special session to enact the 2016-17 West Virginia budget will begin next week, despite a lack of consensus in the Legislature on how to close a $270 million funding shortfall, the Governor’s Office announced Monday.
“The governor will call a special session to begin on May 16,” said Chris Stadelman, spokesman for Gov. Earl Ray Tomblin. “The governor will introduce a budget plan as he did in the regular session.”
That will include tax increase proposals to help close the budget deficit — proposals that were defeated by the Legislature during the regular session.
“I think it will be similar to what was proposed in January,” Stadelman said.
The session will begin just 45 days before a potential shutdown of state services if there is no budget approved when the new budget year begins July 1. Stadelman said it is critical to get the 2016-17 budget passed well before that deadline, so agencies will have time to implement any budget cuts.
In a rare move, the Legislature adjourned the 2016 regular session on March 15 without passing the state budget bill, as the House and Senate could not agree on ways to close shortfalls in the current budget and 2016-17 budget, which begins July 1.
In the regular session, Tomblin had proposed raising $130 million in new revenue with an increase in the state tobacco tax and the introduction of sales taxes on telecommunications services.
Neither house advanced the sales tax proposal, while the Senate passed a tobacco tax increase bill, a bill that was soundly defeated in the House Finance Committee.
Stadelman said Tomblin will again propose a tobacco tax increase, and hopes legislators will give more thorough consideration to the telecommunications tax, currently collected in 41 states.
Also on the table will be a general sales tax increase, either on a temporary or permanent basis, Stadelman said.
“We’re ready to go, and hopefully, we will continue to seek common ground,” he said.
As for reaching consensus on a budget plan by the start of the special session, Stadelman said, “Obviously, lots of discussions are continuing. We still have a week before then.”
“We have worked for weeks with the legislative leadership and the Governor’s Office on the budget, and we continue to discuss the best solutions to address the $271 million shortfall,” Senate President Bill Cole, R-Mercer, said in a statement. “We are looking forward to getting back into session, to hash out the remaining differences and get a responsible, sound budget passed.”
Senate Finance Chairman Mike Hall, R-Putnam, said, “The governor probably feels like he’s got to get people into town and try to hammer something out.”
Hall said that, while there’s no consensus at the moment on the budget, discussions have been ongoing and most legislators have a good idea of the parameters of the budget issues.
“In most years, for most legislators, the budget happens someplace else, and they come in and vote on it,” he said. “This year, everybody’s got to be a Finance chairman.”
Hall said he’s optimistic the budget will be resolved within the first week of the special session, although he said it’s unlikely the full $270 million deficit will be made up through taxes.
“It’s not like we’re coming in from a vacuum with no conversation going on for two months,” he said, adding, “I think we’re highly motivated to get it done.”
While $270 million in tax increases aren’t likely to be approved, Hall said it also would be very difficult to make up the entire $270 million through spending cuts, particularly when only about $1 billion of the $4.3 billion general revenue budget is subject to cuts, with most public education and Health and Human Resources accounts off limits.
“The anti-tax people are convinced there are millions and millions and millions of dollars of government waste that could be squeezed out if there’s political will to do so,” said Hall.
However, he said, the difficulty arises when the discussion moves from cutting spending in general to determining which specific programs are to be cut.
House Speaker Tim Armstead, R-Kanawha, did not respond to a request for comment on the governor’s special session call.
Reach Phil Kabler at firstname.lastname@example.org, 304-348-1220 or follow @PhilKabler on Twitter.