Diary

West Virginia Democrats Continue Brinkmanship on Budget

There is just under 70 days to the end of fiscal year 2016 and West Virginia still doesn’t have a budget for fiscal year 2017. Why? Ask Democrat leadership in the Governor’s mansion and the statehouse.

The last time I wrote to you, the Legislature was wrapping up its second session under Republican leadership. Many great reforms occurred, including right-to-work legislation, a repeal of the state’s prevailing wage for public works projects, and rolling back hundreds of outdated regulations.

The one thing that didn’t get passed was a budget for fiscal year 2017. Democrat Governor Earl Ray Tomblin proposed a $4.3 billion general revenue budget “balanced” due to imaginary tax increases he assumed would pass easily. They didn’t pass at all; with neither chamber nor caucus willing to remove a sales tax exemption from telecommunications. Both chambers also couldn’t agree on an increase to the state tobacco tax.

Instead, the House presented a balanced budget from addition budget cuts, sweeps of agency accounts, and using the revenue shortfall fund (a rainy day fund specifically created for, well…revenue shortfalls). The House and Senate were poised to pass a budget on the final day of the extended session, until the Governor’s office released new revenue projections for 2017.

Tomblin was off by $93 million. Instead of extending the session further so lawmakers could amend the budget, he sent them home. Weeks later he has not called the Legislature back in.

Democrats would have you believe that the reason he hasn’t called lawmakers back to Charleston is because the House and Senate have not come to agreement on “revenue enhancements,” Orwellian newspeak for tax increases. In reality, we’re seeing a game of chicken with perilous consequences. If a new budget for 2017 isn’t passed by the end of June, state government shuts down. Democrats see this as an opportunity, as they believe they can blame Republicans and hurt GOP chances of keeping the statehouse and sweeping the executive branch offices in November.

The Governor is refusing to call lawmakers back into session until there is consensus in both chambers for increasing tobacco taxes and even possibly raising the consumer sales tax by one cent. House Democrats insist on a $1 increase in tobacco taxes. The Senate has been warm to at least a 45 cent increase in tobacco taxes, but also believes there needs to be $100 million in additional cuts, as well as money taken from the revenue shortfall fund.

House Republicans still believe the budget can be balanced after additional cuts and sweeps of agency accounts combined with funds from the revenue shortfall fund. The Governor wants no use of the revenue shortfall fund, despite trying to take over $100 million from it in 2013 to balance the budget. The Democrat-controlled statehouse said no at that time to use of the rainy day fund.

The stalemate continues. The Governor won’t call a special session until lawmakers cave to his demands. Lawmakers could call themselves into session, but with two-thirds needed to approve that it seems unlikely.

Ultimately, the state’s budget issues won’t be truly fixed until a Republican governor can be elected. Tomblin has chosen to only do across-the-board cuts to state agencies, instead of taking hard looks at agencies and seeing what can be cut or trimmed back. He refuses to touch the thousands, even millions, of dollars state agencies have squirreled away over years and decades. He refuses to put an end to subsidies of the state’s greyhound and horse racing industries, which see decreasing revenues every year. He has never fully implemented audits of the state Department of Education, Health and Human Resources, and most recently a Division of Highways audit. He allowed the Public Employees Insurance Agency to purposely spend their excess fund to force the Legislature into being the bad guys and score more points with voters at the ballot box.

The Legislature needs to unite behind a budget proposal and call the Democrats’ bluff. If Democrats choose to take us to a government shutdown for political reasons, it will backfire on them. Then we need to elect Bill Cole for Governor, J.B. McCuskey for Auditor, Ann Urling for Treasurer, and do a systematic audit of our state agencies to cut waste, fraud, abuse, and inefficiencies.

It’s time for serious professionals to run our budget process, not cronies willing to burn down the house.