Ball now in GOP’s court on budget

February 10, 2017

By: Hoppy Kercheval, February 10, 2017

It would be unfair, as well as overly simplistic, to suggest that Governor Justice’s proposed budget for next fiscal year is dead on arrival at the Legislature.  After all, Justice’s plan, which raises $450 million in general revenue taxes, while only cutting $27 million in spending, is the only proposed budget that exists currently.

The Governor submits a budget to lawmakers with this implied instruction: “If you have a better idea, let’s see it.”  In this case, that puts the ball in the court of the Republican majorities in the Senate and the House of Delegates.

The reaction of Republican leaders to Justice’s massive tax increase and miniscule cuts ranged from disappointment to flabbergast and even anger. They were operating under the assumption, based on comments by Justice Chief of Staff Nick Casey on Talkline just a few days ago, that the administration was contemplating cuts of between $390 and $600 million.

House and Senate Republicans held a rare joint caucus Thursday to review the Governor’s budget and plan a strategy.  House Speaker Tim Armstead and Senate President Mitch Carmichael, appearing together on Talkline, agreed that they would now assume responsibility for developing a counter proposal that includes significant cuts.

The key for the GOP will be to ready that proposal quickly.  The longer they wait, the more it will appear that the Republicans cannot unify on the deep and potentially painful cuts they have been lobbying for.

Justice pleaded with lawmakers, and for that matter the entire state, during his State of the State address to support his tax increases.  His appeal was emotion; he hates tax increases, but it’s the only way out.  That pitch will no doubt work with those who have put their trust in Justice to lead the state out of the economic doldrums. To them, digging into their pockets for a few more bucks is a necessary, perhaps temporary, part of the plan.

But for others, it’s simple math.  State Chamber of Commerce President Steve Roberts says the proposed .20 percent tax on the gross revenues of businesses, along with eliminating sales tax exemptions for professional services and advertising, add up to about $300 million in new taxes on business, and that’s not the business-friendly message that Justice sold during the campaign.

We understand that campaigns are given to hyperbole and vague promises that are difficult to fulfill once in office, and the fact that Justice has made a 180 degree turn from what he said during the campaign about taxes is a fair criticism.  However, perhaps Justice’s greatest mistake prior to the election was to say repeatedly that turning around West Virginia would not be that hard.

As the new Governor is finding out, which many already knew or suspected, reversing the fortunes of West Virginia will be incredibly difficult.