At the halfway point of the legislative session, it’s important to recognize there is still much work to be done. West Virginia is experiencing budget challenges unseen in a generation, and we must take action – both legislative and administrative – to ensure our fiscal house is in order.
Over the past three years, we have implemented budget cuts of 20 percent. For the first time in anyone’s memory, our state’s base budget for the past two fiscal years has been lower than previous years, and the proposed 2017 budget is $110 million lower than the FY 2015 budget. As our economy shifts, we can no longer rely on declining severance tax collections to be our main source of revenue. We must make the tough decisions to ensure our budget is structurally sound – putting us on the path to a stable financial future for the long term.
During my State of the State address, I introduced a balanced budget that uses no money from our state’s Rainy Day Fund and does not include any across-the-board budget cuts, beyond those already in place. Putting together the fiscal year 2017 budget required hard work and difficult decisions. My proposed budget is fiscally responsible, continues to provide the services on which so many West Virginians rely, gives business and industry the flexibility they need to operate, and projects a return of budget surpluses by 2019.
This session, I’ve proposed a plan to increase our state’s tobacco tax by 45 cents a pack – an increase that is projected to generate nearly $71.5 million in new revenue each year. Combined with savings from a new prescription drug contract, a portion of this revenue will support my responsible plan to fund PEIA, ensuring state employees do not see dramatic benefit reductions proposed for the coming year. So far, my proposal is the only plan on the table. I urge legislators to take up this piece of legislation and do what’s right for our teachers, state employees and others across the state who rely on PEIA coverage.
I’ve also proposed eliminating a sales tax exemption on cell phones and land lines – putting us in step with 41 other states across the country. By placing the same 6 percent sales tax on cell phones and land line usage our residents are already paying on other goods, the state can collect an extra $60 million each year.
In keeping with promises of the past, I’ve proposed legislation to pay off our workers’ compensation debt more than a decade ahead of schedule. We’ve come too far and worked too hard to go back on these commitments. Removing these excess taxes can provide relief to our coal and natural gas industries, allowing these companies to deal with current economic realities to continue employing West Virginians and supporting our economies.
Other proposals to significantly reduce the severance tax on coal have been discussed, but the impact on our state budget could be well in excess of $100 million and would cripple many of our local economies.
At this point in the session, the Legislature appears to lack consensus on the best way to balance our state’s budget. Some have suggested we can make up the deficit by an additional 6.5 percent across-the-board cut, while others believe we should fill our budget shortfall by taking large sums from the Rainy Day Fund. We can no longer rely on cuts and one-time sources of money to get us through these budget challenges, and we cannot raid our state’s savings account because we aren’t living within our means.
At a time when our state is facing serious budget challenges and a lack of funding for essential services, we must seriously consider these – and other – new revenue opportunities. I commend the Legislature for coming together to pass supplemental bills that allowed us to pay our current bills on time and without delay and look forward to working with them to ensure both the current and next budget are balanced.
Serving our state and her people comes with great responsibility. We must work together, not as Democrats or Republicans, but as West Virginians. This is West Virginia, not Washington, and it’s time we put partisan politics aside and focus on issues critical to our state’s continued growth. There is more work to do, and I challenge my colleagues on both sides of the aisle to come together and get to work to do what’s right for West Virginia.
Governor Earl Ray Tomblin is the 35th and current Governor of West Virginia. He can be reached at 304-558-2000 or 1-888-438-2731. Follow on Twitter @GovTomblin.