Senate Finance Committee members Tuesday passed the Senate's version of the 2016-17 West Virginia budget that would take no money out of the state's Rainy Day reserve funds to balance the budget.
However, the Senate's version of the $4.3 billion general revenue spending plan (SB 269) assumes that revenue measures passed by the Senate but rejected in the House of Delegates - including a $1-a-pack increase in the cigarette tax, to raise $121 million, and elimination of state subsidies for greyhound racing, to free up more than $20 million a year - somehow will become law before the regular session ends at midnight Saturday.
Meanwhile, House Finance Committee members Tuesday evening were looking at ways to close that funding gap - including a proposal to take $29.7 million from the Rainy Day funds.
The House of Delegates' version of the 2016-17 budget, would use a combination of drawing about $72.8 million in unexpended funds from various agency accounts, imposing about $10 million to $12 million in additional cuts to agency budgets - including selling one of the state's two airplanes - as well as taking money from the Rainy Day funds to close the gap.
"Obviously, they're trying to put together a budget without our revenue measures," said Senate Finance Chairman Mike Hall, R-Putnam, adding, "I don't think there's enough cash out there not to use that Rainy Day Fund."
Earlier this session, Gov. Earl Ray Tomblin said he opposed raiding the Rainy Day funds to balance the budget, saying the state has grown the funds, currently at about $780 million, over 22 years to assure stable bond ratings and to have a buffer in the event of a major natural disaster.
"To get into the Rainy Day Fund to fund on-going expenditures is not the fiscally responsible thing to do," Tomblin said last month.
House and Senate budget conferees will begin work Monday to come up with a compromise between the two versions of the budget - but the question is how long they will have to work. Tomblin has said he will extend the 2016 session for the budget conference for three days, but said he is not inclined to make additional extensions, unless the conferees are making real progress.
Hall said that, at some point, the conferees will have to come to agreements on how to close the funding gap, adding, "I don't know if that will be now or in May."
He was referring to talk that legislators could be called back into special session sometime this spring to complete the 2016-17 budget.
"We have to pass a balanced budget, but we don't have to come out of this 60-day session with one, as long as we have a budget approved before the fiscal year begins July 1," he said.
Both the House and the Senate versions of the budget bill include $43.5 million to fund an increase in employers' premiums for Public Employees Insurance Agency health coverage to help avoid massive, $120 million benefits cuts for about 230,000 public employees and dependents insured through PEIA.
That has been a sticking point throughout the session, with Democrats accusing Republican leadership of the House and Senate of failing to come up with a plan to fully fund PEIA.
"That PEIA commitment is fulfilled," Hall said Tuesday.
Also Tuesday, Senate committee members raised concerns that the Legislature cannot keep using one-time measures to balance the budget, year after year.
"Next year, we'll be in the same predicament, because we haven't made any structural changes," said Sen. John Unger, D-Berkeley.
"We're passing the budget this year and praying that, next year, the world will be a better place, which I think is a fiscally irresponsible approach," he added.
Hall agreed, noting, "We can no longer rely on the severance tax income being what it was ever again. Citizens of the state and elected officials are going to have to make the decision of raising tax revenue with something that's stable."
For the current budget year, severance tax collections of $145.5 million are running 49 percent below projections, primarily because of plummeting prices for natural gas and coal.
Sen. Craig Blair, R-Berkeley, said the state, like a household or business, has to cut expenses to live within its means.
"We have to look at every opportunity for efficiencies," Blair said. "It is not just going out there and raising taxes, looking for the opportunity to raise taxes to solve the problem."
Several senators said the only real hope is finding ways to grow the economy and create jobs.
"The biggest problem we've made and continue to make is cutting funding to education, particularly higher education," said Sen. Jeff Kessler, D-Marshall.
As for the 2016-17 budget, Kessler added, "I would hope we could hold strong on leaving the Rainy Day funds alone."
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220 or follow @PhilKabler on Twitter.