On Wednesday, day 67 of the West Virginia budget impasse, state senators advanced a bill to raise about $78 million a year in new tobacco taxes - but without an amendment Senate leaders said is needed to assure passage in the House of Delegates.
After lengthy, heated debate, Senate Health and Human Resources Chairman Ryan Ferns withdrew his amendment, which would have excluded smokeless tobacco and other non-cigarette tobacco products from the proposed tax increase (SB 1005). Ferns withdrew the proposal after Sen. Tom Takubo, R-Kanawha and a pulmonary physician, said he wouldn't support it - a move that negated the Republicans' razor-thin margin in the Senate.
Without providing specific studies to support his claim, Ferns, R-Ohio, argued that the proposed 12 percent increase in wholesale taxes for smokeless tobacco products would have nominal effect on reducing usage.
"The reality of it is, this is just a politically advantageous way to pass taxes onto the citizens of West Virginia," Ferns said.
The 45-cent-per-pack increase in cigarette taxes appears to be the only one of three tax increase proposals offered by Gov. Earl Ray Tomblin that has any chance of passage in the House. However, Senate leaders warned Wednesday that keeping the tax increase on smokeless tobacco could topple what is believed to be a slim majority of support for the bill in the House.
"This is, ultimately, what is believed to be the end product that can pass both houses," Senate Majority Leader Mitch Carmichael, R-Jackson, said in advocating adoption of Ferns' amendment, which would reduce revenue from the tobacco tax bill by about $4.7 million a year.
Carmichael said he would prefer keeping the smokeless tobacco tax, as well as a $1-a-pack increase in cigarette taxes, but that's not the political reality.
"You can't always get what you want," he said. "You sometimes have to take half measures."
Likewise, Sen. Craig Blair, R-Berkeley, said failure to exempt smokeless tobacco from the bill would leave the Legislature with no new revenue to help close a $270 million shortfall in the 2016-17 state budget.
"This is a compromise," Blair said. "If we don't do it, ladies and gentlemen, we're going to get nothing."
However, the amendment drew loud objections from Senate Democrats, including Sen. Ron Stollings, D-Boone, a physician who said he was embarrassed that the Senate was doing the bidding of tobacco lobbyists, whom he said were watching from the rear of the chamber.
"I'm also upset that we're OK with West Virginia being a destination location for buying cheap tobacco products," Stollings added, referring to comments that higher taxes would hurt retailers in counties bordering Ohio, Pennsylvania and Maryland, where tobacco taxes are considerably higher.
Senate Minority Leader Jeff Kessler, D-Marshall, said the vote on the amendment would be the easiest of his 19 years in the Senate.
"If you vote green, you're voting for Big Tobacco. If you vote red, you're voting for the health and welfare of the people of West Virginia, and our children," Kessler said.
Ultimately, there was no vote. Shortly after Takubo told senators he could not support the amendment, Ferns withdrew it. Without Takubo's vote, the amendment probably would have died on a 17-17 tie vote.
Similarly, Sen. Roman Prezioso, D-Marion, withdrew an amendment to raise the 45-cent cigarette tax increase to $1 a pack - an amendment rejected Tuesday in the Senate Finance Committee on a party-line vote.
Prezioso noted that the bill dedicates $43 million of the $78 million in new taxes to fund PEIA employer premium increases - offsetting $120 million in pending health care benefit cuts for public employees - but said the 45-cent increase only solves PEIA funding problems for one year.
"Raising the cigarette tax is commendable, but it doesn't fix the problem beyond the next fiscal year," he said.
Asked earlier if there are 51 votes in the House to pass the tobacco tax, House Finance Chairman Eric Nelson, R-Kanawha, said, "I'm the Finance chair, not the majority whip," referring to the delegate assigned to poll members to determine levels of support for key bills.
However, Nelson said, the bill will go directly to the House floor, without any committee assignments.
"We want to speed things up as quick as possible," he said.
Also during Wednesday's third day of the special session:
n Senate President Bill Cole, R-Mercer, and House Speaker Tim Armstead, R-Kanawha, sent a letter to Tomblin, asking him to expand the special session call with new items "to help close the $271 million budget gap in the least painful way possible."
Their request includes several bills that failed during the regular session, including: eliminating the Racetrack Modernization Fund, which provides about $9 million a year in matching funds for gambling-area upgrades at the state's racetrack casinos; decoupling greyhound racing at racetrack casinos in Nitro and Wheeling, which would free up about $21 million a year that goes to subsidize racing purses; and making minor revisions to the School Aid Formula, freeing up about $14.8 million a year from the $1.6 billion public school funding plan.
"We believe circumstances have changed enough since then that the pieces of legislation merit further consideration," the leaders wrote.
Cole and Armstead also are seeking additional cuts, including eliminating the office of the Secretary of Education and the Arts, to save about $850,000 in salaries and benefits.
In a letter of response Wednesday afternoon, Tomblin said he's willing to consider amending the call, but only after legislative leaders present a "comprehensive, realistic solution to the state's budget situation."
"Before I place any item on an amended call, it must be clear how the item fits into your overall plan to balance the budget," Tomblin wrote, adding he also wants assurance that any new items have a "realistic chance" of being supported by the Legislature.
Tomblin noted that, despite numerous meetings since the regular session ended March 15, the administration has been unable to reach agreement with legislative leadership on how to balance the budget.
n House Minority Leader Tim Miley, D-Harrison, sent a letter to Armstead on behalf of the House Democratic Caucus, asking for procedures for members to refuse their $150-a-day pay during the special session.
"I'm just a little flabbergasted and frustrated, 75 percent of us are sitting around, twiddling our thumbs, and not working on anything productive," Miley said, noting that only the 25-member House Finance Committee has been meeting, and no bills have reached the House floor.
"The public is outraged we haven't gotten our work done for our one constitutionally mandated duty," he said.
Initial discussions with House staffers found no provisions for legislators to refuse pay, so Miley said members will have the option of giving the pay to charity or writing a check back to the state.
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220 or follow @PhilKabler on Twitter.