CHARLESTON — The House Finance Committee advanced a $4.6 billion general revenue budget, reflecting the spending bills passed by delegates so far — by no means the final say on state finances.
The budget bill reviewed by members of the Finance Committee Wednesday afternoon will be examined by the full House over the next few days. But even then, financial priorities will need to be reconciled with what the Senate wants.
Among the big issues still at play are tax cut proposals, pay raises for state employees and changes to the Public Employees Insurance Agency.
Gov. Jim Justice provided additional flexibility earlier Wednesday when his administration raised revenue estimates for the coming fiscal year by about $850 million. The governor’s revenue estimate essentially translates to a cap on base general revenue spending.
That gift of financial latitude came without much explanation.
“That revenue adjustment that we received today — was there any explanation as to what happened to the revenues?” asked Delegate John Williams, D-Monongalia.
The only answer he got was that the governor’s adjustment came in the form of an official letter. Otherwise, no one could immediately shed light.
The adjustment came on the heels of yet another report that state revenue for February exceeded monthly estimates by $111.8 million. For the current fiscal year, the state is up $1.1 billion, according to the latest figures.
Much of that cushion is based on two revenue sources. Personal income tax collections are up $198 million for the fiscal year. Severance tax collections, notoriously fluid, are up $540.7 million over the fiscal year’s estimate.
So as lawmakers continue their work on the coming year’s budget, among the factors will be whether those favorable economic trends continue.
Justice at the start of this year’s legislative session called for a “relatively flat,” $4.884 billion budget that includes pay raises for most state employees and some increased financial support for the Public Employees Insurance Agency.
Late last week, the state Senate passed a $4.4 billion general revenue budget that includes more than $1 billion in surplus appropriations that would be prioritized if West Virginia concludes the fiscal year with more money than anticipated.
The House budget, which also includes roughly $1 billion in surplus spending, reflects only the financial bills passed by delegates so far.
The House version does not include the average 5% pay raises proposed by the governor in anticipation of accepting an alternative coming from the Senate, $2,300 across-the-board raises.
And the House budget bill reflects the first phase of the personal income tax cut that the governor initially proposed, even though a newly constructed proposal is coming from the Senate. The House has not yet acted on that tax proposal, which includes a 21.25% personal income tax cut, a credit on the taxes people pay on vehicles and a personal property tax cut aimed at small businesses.
Also not reflected in the House budget is a set of changes to the Public Employees Insurance Agency — laid out in a Senate bill that delegates have not yet taken up.
“The million-dollar question I have is, we didn’t incorporate into this budget — I’m assuming this budget does not change, will it change or what did we take away — if the Senate tax bill that comes over is passed and the PEIA bill is passed,” said House Minority Leader Doug Skaff, D-Kanawha. “Is this budget unharmed by that?“
The answer is the House budget, so far, doesn’t reflect those big financial issues. The regular legislative session ends March 11.
