As legislators reconvene for the 14th day of a special session on the 2016-17 West Virginia budget this morning, the focus will be on whether the House of Delegates can pass a tax increase to help close a $270 million budget gap, after rejecting a series of tax proposals passed by the Senate during the regular and special session.
"We're hopeful, is probably the best way to phrase it," Chris Stadelman, spokesman for Gov. Earl Ray Tomblin, said Friday of prospects for the House's passage of a newly proposed tobacco tax that the Senate is expected to take up today.
After vetoing the budget bill (HB 101) passed by the Legislature on June 2 on the grounds that it over-relied on one-time money and an "irresponsible" raid on Rainy Day reserve funds, Tomblin on Wednesday proposed a compromise contingent on passing a tobacco tax hike, including a 65-cent-a-pack increase on cigarette taxes.
That proposal would raise nearly $100 million in new revenue for the state.
However, previous attempts to increase tobacco taxes have failed in the House. In the regular session, a $1-a-pack increase that passed the Senate on a 26-6 vote was overwhelmingly rejected in the House Finance Committee.
In the special session, the Senate passed a 45-cent hike on 17-16 vote, but 35 of 36 House Democrats, pushing for a higher increase, joined with no-tax Republicans to defeat the bill, 55-44.
The Senate, during the regular session, also passed a bill to increase the state sales tax by 1 percent, to provide about $300 million a year in additional highways funding. The House never took up the bill.
House Finance Committee Chairman Eric Nelson, R-Kanawha, said Friday that it is crucial to get a workable budget plan passed in the next few days, saying it would be unthinkable to have a government shutdown on July 1.
"We've got to put down our shields and come to the middle and get this thing done for the state," Nelson said.
Nelson said he's going to do everything he can to get support for the governor's latest proposals.
"We've got to stop playing games when they will affect the people of the state," he said.
Stadelman said Tomblin has been working with House members to generate the needed 51 votes to pass the compromise tobacco tax increase.
"The governor's had conversations with Minority Leader [Tim] Miley and Speaker [Tim] Armstead, among others, and will continue to work hard to get the 65-cent tobacco tax passed," Stadelman said. "The governor has compromised in a significant way on Rainy Day money, going far deeper into that account than he has wanted to."
The latest proposal would take about $70 million out of the Rainy Day funds, less than the $182.6 million the Legislature wanted to take out in its budget bill, but significantly more than the "few million dollars" that Tomblin previously said would be the maximum acceptable amount to take out of the state's savings accounts.
"Our hope is the Legislature will also compromise, that those who only wanted 45 cents and those who wanted $1 will compromise and accept 65 cents," Stadelman said.
Miley said Friday he has been talking with the Governor's Office about dedicating about $24 million of the tobacco tax revenue to offset employee and retiree premium increases in PEIA health insurances, increases otherwise mandated under state law, which requires an 80-20 match of the increases in employer premiums built into the 2016-17 budget bill.
"We're looking at steps taken to negotiate some relief for the retirees and active employees from their premium increases and benefit cuts," Miley said.
If that provision is added, Miley said he believes as many as 24 to 25 House Democrats would vote for the tobacco tax, up from about 19 committed "yes" votes without it.
Miley said he also has asked for assurances from Armstead that the House leadership can deliver a 51 percent majority of Republicans in support of the tax plan.
Meanwhile, the state budget impasse reaches its 91st day today, with a state government shutdown looming in 19 days.
The Senate is scheduled to reconvene at 11 a.m., with plans to suspend rules and pass three bills: the tobacco tax increase, a bill transferring $10 million in state Lottery profits from the state Infrastructure Council Fund into General Revenue and the new version of the budget bill.
The House reconvenes at 2 p.m.
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220, or follow @PhilKabler on Twitter.