Gov. Earl Ray Tomblin late Wednesday afternoon vetoed what he called a "reckless" budget bill passed by the West Virginia Legislature, and said he has a deal with the state Senate on a different budget - one that includes a 65-cent-per-pack increase in cigarette taxes to help close a $270 million budget hole.
The cigarette tax increase - with proportionate tax hikes on other tobacco products - would raise close to $100 million a year in new revenue.
Tomblin vetoed the budget bill (HB 101) passed by the Legislature on June 2. In a statement accompanying his veto, he said lawmakers' proposed budget was "irresponsible and leaves significant shortfalls in 2018 and 2019 that would further deplete the reserves we've worked so hard to preserve."
"I have worked with my colleagues in the Senate to develop a plan, including a 65-cent tobacco tax, that balances the fiscal year 2017 budget without draining a quarter of our state's Rainy Day Fund, and while maintaining the critical services on which so many West Virginians rely," the governor said.
State Senate President Bill Cole, R-Mercer, said in a statement that he was disappointed by the governor's veto, but added, "I understand and respect his desire to maintain a healthy balance in the state's Rainy Day Fund, and why that would lead him to veto the Legislature's proposed budget. In order to avoid a government shutdown, it is time to put the partisan politics aside and work together to pass Governor Tomblin's proposal."
Tomblin applauded the Senate for its willingness to work to find a "reasonable, bipartisan budget solution," and strongly urged the House of Delegates to consider the solution without delay.
House Speaker Tim Armstead, R-Kanawha, said in a statement that he was "saddened" by the governor's veto and seemed skeptical of its chances in the House, where delegates voted down a proposed 45-cent cigarette tax increase on May 24.
"Twice this year, the Governor has submitted budget proposals that could only be balanced with significant tax increases - proposals that failed to gain support of even his own party," Armstead said. "Now the Tomblin administration has rejected efforts to pass a reasonable alternative."
He noted that many Democrats, as well as Republicans, voted against the tax increase in the House, and said Tomblin "bears the responsibility to not only put forward an alternative, but to work to gain support within his own party to pass it."
When the House defeated the 45-cent cigarette tax increase, many Democrats who voted against it said they were in favor of a larger tax, while Republicans against it expressed their opposition to any tax increase.
House Democrats conducted a caucus by telephone conference call Tuesday evening to discuss "the potential proposals the governor might put out, and how they would be received," House Minority Leader Tim Miley, D-Harrison, said Wednesday.
"I certainly can't confirm there is any agreement with a majority of Democrats in the House," Miley said of finding a "happy medium" between the original 45-cent increase and the alternative $1-a-pack increase favored by many House Democrats.
Miley also said he doubts a majority of House Republicans will support the tobacco tax increase.
"I really question whether Republicans will support any tax increases at this point," Miley said. "My gut tells me Republicans are lining up for no new taxes whatsoever."
Prior to Tomblin's announcement Wednesday, Senate Minority Leader Jeff Kessler, D-Marshall, alluded to the governor's coming agreement with the Senate.
"I think you're going to see a plan come out of the Governor's Office this afternoon that has significant appeal to Senate Democrats, as well as Republicans," Kessler said. "We don't want to shut down state government."
In his veto message, Tomblin reminded legislators that a July 1 government shutdown is looming if they fail to pass "a responsible budget bill" by that date.
"In issuing this veto, I urge the Legislature - in the strongest of terms - to return to the Capitol immediately and work with me to tailor a responsible budget bill for fiscal year 2017," Tomblin wrote.
Armstead laid blame for any government shutdown at the feet of the governor, because Tomblin refused to sign the Legislature's budget bill, which would have used $186.6 million in Rainy Day reserve funds and $62.4 million in one-time funds to help close the deficit.
"It would be reckless and irresponsible to deplete substantially our Rainy Day Fund and jeopardize our bond ratings simply because we wish to avoid or delay taking necessary action to enhance revenues," he said.
On June 2, the House and Senate recessed the special session until June 12. There was no consensus Wednesday on any provision in state law or legislative rules that would allow the Legislature to reconvene before that date, although Cole told news outlets that he hopes to bring lawmakers back by the end of the week.
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220, or follow @PhilKabler on Twitter.