Armed with a hefty revenue surplus, Republican legislative leaders and their majorities are considering a spread of both potential tax cuts and spending increases this coming session.
On Tuesday, one day before the legislative session begins and the governor delivers his State of the State address, House Speaker Roger Hanshaw, R-Clay, and Senate President Mitch Carmichael, R-Jackson, laid out their legislative priorities for 2019.
The new spending — as they proposed — could come in the shape of a 5 percent pay raise for all public employees and some form of a free community college and/or workforce development bill. Gov. Jim Justice has also proposed a $100 million lump sum deposit into Public Employees Insurance Agency coffers.
As far as tax cuts, both Carmichael and Hanshaw have floated phasing out the property tax on business equipment and inventory as well as eliminating outright income taxes on social security.
The leaders also discussed a number of education policies, like allowing teachers in certain subjects to be paid more than others.
As Justice announced Tuesday, the Legislature will have some money to work with this year. December general revenue collections of nearly $423 million came in $44.8 million above estimates.
Additionally, year-to-date collections of more than $2.2 billion were almost $186 million above estimates, and made for the largest cumulative surplus for the first six months of any fiscal year in history.
“The best way to qualify this is just this,” Justice said. “The biggest in history, now that’s pretty big if you think about it, the biggest-in-history surplus for the first six months of our state in a year.”
However, everything has its price. Last year’s legislation to eliminate the property tax on business equipment and inventory would have cost $140 million per year after the 7-year phase-in; the public employee pay raises would cost more than $107 million; Justice wants to put $100 million in revenue surplus funds into PEIA; the community college bill the Senate passed last year would have cost $8 million per year; and Carmichael said in an interview Monday he wants to revisit legislation forming an intermediate court of appeals, which could cost more than $10 million.
On Monday, Carmichael acknowledged that not every wish would come true, and the state has to balance its budget at the end of the day.
“We’re going to be cognizant and very prudent at how we spend this money,” he said. “Will all this get accomplished? Probably not, no way. But we’re going to prioritize as we go through, take a hard look at the revenue estimates, make sure they’re correct — or sustainable — and budget accordingly.”
In a news conference Tuesday, Justice said he’s ready to tap the brakes if he sees the Legislature getting overzealous now that state revenue collections are up, given the inevitability of a bust-year at some point down the line.
“When you’re going to make a mistake is when you have too much,” he said. “And that’s my job, is to make sure that we don’t make that mistake — we don’t get out over our skis.”
The lawmakers introduced other priorities such as an overhaul of the state foster care system, an expansion of the Second Chance for Employment Act, and others.
The Republican priorities bear some crossover with those from the minority caucuses. The 14 Senate Democrats issued a news release last month containing their priorities, which include eliminating income tax on social security, “improving salaries and benefits” for public employees, improving mental health and drug addiction services in the state, and others.
House Democrats have trained their focus on finding a banking solution for the state’s medical marijuana program, scheduled to launch July 1. Both Justice and Carmichael have voiced support for a financial fix, although how that will take shape is unclear.
They have also expressed interest in recreational marijuana, although Justice, Hanshaw and Carmichael have all expressed opposition to the idea.