West Virginia Senators put a tobacco tax increase back in play Wednesday - this time, with a 65-cent-a-pack increase in cigarette taxes - but with no assurances that the House of Delegates will be any more likely to pass the tax after rejecting a 45-cent increase on a 55-44 vote on May 24.
"I think the 65-cent tobacco tax is something they'd consider on their side of the house," Senate Finance Chairman Mike Hall, R-Putnam, said Wednesday.
The first attempt at a tobacco tax hike (SB 1005) in the now 12-day special session of the Legislature was crushed in the House as 35 Democrats who wanted a more substantial tax increase joined 20 no-tax Republicans in voting to kill the bill.
The vote to originate a new tobacco tax followed an acrimonious Senate Finance Committee meeting, with Democrats demanding to know the Senate and House leadership's plan to raise revenue to close a $270 million gap in the 2016-17 budget - a gap that will grow to $380 million for the next budget year if the current shortfall is plugged with Rainy Day reserve funds and sweeps of one-time money.
"We've been down here two weeks, we've burned through nearly a half-million dollars, and we still get, 'I don't know what the other house is doing,' " complained Sen. John Unger, D-Berkeley. "What is the plan?"
Unger made the comments over a bill, later rejected in committee, to temporarily increase the consumer sales tax by 1 percent for three years, to raise about $200 million a year (SB 1004).
Unger peppered Hall with questions about whether Senate leadership is committed to support either the sales tax increase - amended in committee to reduce the increase to a half-percent - or the tobacco tax, and whether there is support to pass either measure in the House.
"With all due respect, you haven't even sold it to the president of the Senate. Even your own leaders don't buy into the plan," Unger said of the sales tax increase.
"I can't say it's the plan of our caucus," Hall conceded. "It would be dishonest for me to say that."
Earlier Wednesday, Senate President Bill Cole, R-Mercer, told reporters he did not know if he would support a sales tax increase, adding that he favors the cigarette tax increase because it has the better chance of passage in the House.
Ultimately, the sales tax bill was rejected by the Finance Committee by a 10-6 margin, as Democrats and Republicans each voted by a 5-3 margin to defeat it.
Hall said he believes it is critical to raise some new tax revenue now, or force the next Legislature to either enact much larger tax hikes or make untenable cuts to public education, higher education, health care and corrections, among other programs.
"We are looking at a fiscal cliff I genuinely believe is real," Hall said, adding, "Whoever comes back in January, February, or maybe sooner, you'll be facing a fiscal crisis."
He said the proposed 2016-17 budget makes about $115 million in base budget cuts, but avoids additional cuts to public education, higher education and the departments of Health and Human Resources and Military Affairs and Public Safety - but warned it will be impossible to protect those programs if the 2017-18 shortfall grows to $380 million, as projected without new revenue increases.
Senate Majority Leader Mitch Carmichael, R-Jackson, said he had hoped for a balanced plan of $90 million in new taxes, $90 million in Rainy Day funds and $90 million in spending cuts, in addition to the more than $80 million in cuts to Gov. Earl Ray Tomblin's budget plan, but said that had proven impossible to achieve.
"You can't raise enough revenue or cut enough government in one year to fix it," Carmichael said of the budget deficit.
Senate Minority Leader Jeff Kessler, D-Marshall, said it would also be irresponsible to plug the budget gap with up to $200 million of Rainy Day funds, setting the fund up to be depleted with future $380 million shortfalls in the 2018 and 2019 fiscal years.
"There's not one person in this room - if there is, raise your hand - who thinks it's good policy to take $200 million out of the Rainy Day fund," Kessler said. "That will absolutely be the worst vote we could take in this Senate. It will kill two decades of building up that fund."
"If all we're going to do is raid Rainy Day, we should have done it on the first or second day and gone home," said Sen. Ron Stollings, D-Boone.
The latest version of the cigarette tax - with proportionate increases in other tobacco products and in e-cigarette liquids - would close about $100 million of the budget gap.
Cole said he favors a tobacco tax as a revenue producer, since it is: a "sin tax"; is a voluntary tax; and requires those who have higher health care costs to pay a little more in taxes.
Cole, a gubernatorial candidate, bemoaned "political gamesmanship" by Democrats and questioned why Tomblin has not been more active in pushing for the tobacco tax.
"It's his bill. It's his budget. Why wouldn't he be working hard to bring it around?" he said.
Meanwhile, the Senate is scheduled today to amend its version of the budget into the House's budget bill (HB 101), pass it and send it back to the House.
Tomblin has said he will veto any budget bill that is balanced using anything more than a "few million dollars" from the Rainy Day funds. The House bill uses $143 million from Rainy Day, while the Senate version taps Rainy Day for nearly $200 million.
Asked if the tax increase proposals will become more viable if Tomblin vetoes the budget bill, Hall said, "You would think that, but I'm not sure."
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220 or follow @PhilKabler on Twitter.