CHARLESTON, W.Va. (AP) — In his first State of the State address, Gov. Jim Justice on Wednesday proposed government cuts and incremental tax increases to close a projected $500 million West Virginia budget deficit next year.
The newly elected Democrat, echoing several themes he raised at his inauguration in January, also called for a 2 percent pay raise for classroom teachers and new $1.4 billion in bonding, or even twice that, for highway and bridge projects that he said would create tens of thousands of jobs.
If West Virginia, with its economic woes, fails to reach for new solutions like he’s offering and does nothing new, then it’s inviting a bad fate, Justice told a Capitol chamber packed with lawmakers, other officials and guests.
“I always thought that if you got caught by Frankenstein, you deserve to die,” he said.
His proposed budget would increase to about $4.8 billion from general revenues. Total spending, including federal and other dedicated funds, would be about $12.9 billion. The new fiscal year starts July 1.
Justice, a 65-year-old businessman who owns coal mines, farms and the Greenbrier Resort, would set aside $105 million for state economic development and infrastructure investment. That would be an “SOS” fund intended to help save the state whose economy has been depressed with a sharp downturn in coal mining and related employment and taxes.
He’ll need the support of the Republican-controlled Legislature for many of his proposals. Its leaders have advocated government cuts to help close the budget gap and eliminating certain sales tax exemptions.
Justice called for eliminating exemptions from the 6 percent sales tax for advertising and professional services, a category that includes lawyers and accountants. He also proposed a 0.5 percent sales tax increase and 0.2 percent tax on commercial gross revenues, which he said could sunset in three years. He advocated increases in beer and liquor taxes that would fund tourism promotion.
For highway projects, he proposed raising the annual license plate decal fee to $50, increasing the West Virginia Turnpike toll by $1 and raising the excise tax on gasoline by 10 cents a gallon.
His plans include 45 highway projects across the state with bonding over 15 to 20 years, most of which would require voter approval.
Senate President Mitch Carmichael said afterward that he liked some Justice proposals, like curbing regulation of people and businesses and going to voters with bonding proposals for highway projects they’d have to pay for, but not others.
“In terms of just general tax increases on a people that are already overtaxed, that’s going to find a difficult reception in the Legislature,” Carmichael said.
Justice proposed closing a $123 million deficit in the current year’s budget by drawing from the state’s rainy day fund.
Among his $26.6 million in proposed cuts for the coming year, West Virginia and Marshall universities together would lose almost $8.7 million in state aid. Other cuts target the state’s Regional Education Service Agencies, WV Network, WV Film Office, Educational Broadcasting Authority, Division of Labor and Division of Culture & History.