Breaking a 92-day budget impasse, the West Virginia House of Delegates on Monday passed a $98 million increase in tobacco taxes on a 63-35 vote (HB 1012), a key component to help close a $270 million funding gap in the 2016-17 state budget and avoid a government shutdown on July 1.
"Most of all, a 'yes' vote assures our government stays open July 1," House Finance Chairman Eric Nelson, R-Kanawha, said in urging passage of the bill.
Monday evening, the Senate accepted a House amendment to the bill and passed it on a 29-3 vote, sending the key tax-increase portion of the budget bill to Gov. Earl Ray Tomblin.
The votes came on the 16th day of the special session on the budget, and nearly three weeks after the House rejected a previous tobacco tax bill that would have included a 45-cent-a-pack increase on cigarette taxes, 20 cents a pack less than the tax hike approved Monday.
Even proponents of the 65-cent-increase bill were not particularly enthusiastic about the option, describing it as a last-ditch effort to get the budget passed before a looming shutdown of the government on July 1.
"We're unable to get the budget done without additional taxes because we have an unwilling partner in the Senate and an unwilling governor," said House Majority Whip John O'Neal, R-Raleigh.
O'Neal voted for the tax bill Monday, after breaking with House leadership and voting against the earlier tobacco tax increase on May 24.
That bill was defeated when 35 of 36 House Democrats joined 20 anti-tax Republicans to vote it down by a 55-44 margin, with many Democrats complaining that the 45-cent increase would neither raise sufficient revenue nor effectively deter smoking.
On Monday, 21 of 36 House Democrats voted for the bill, after House Minority Leader Tim Miley, D-Harrison, urged delegates to "get the work done."
"We all say we want to avoid a government shutdown. We all say we want to stop the bleeding at $35,000 a day," Miley said, referring to the daily cost of legislators' pay and expenses in special session. "We're at the 11th-and-a-half hour, trying to get a budget passed."
Opponents of the tax increase argued that it is forcing residents to pay for the Legislature's inability to make significant cuts to state spending. The budget bill cuts spending by about $120 million, or less than 3 percent overall.
"This is nothing more than bipartisan legal plunder, so we keep the growth of state government continuing to get bigger and bigger as the population gets smaller and smaller," said Delegate Michael Folk, R-Berkeley.
Before passage of the tobacco tax increase, the House amended the bill to remove a provision that would have prevented municipalities from imposing additional restrictions on the sale or promotion of tobacco products, something critics feared could be a back-door attempt to overturn indoor smoking bans.
"When I learned about this yesterday morning, I was more than a little incensed by the disingenuousness of the tobacco lobby," said Delegate Don Perdue, D-Wayne. "This was absolutely horrific, an end-run."
Delegates followed that passage vote with approval of the 2016-17 budget bill (SB 1013) on an 84-15 vote.
The House amended the $4.187 billion spending plan to restore $1.5 million in funding for the Center for Professional Development and increasing funding for Blue Ridge Community and Technical College, in Martinsburg, by $500,000 - changes that might or might not be approved by the Senate or survive line-item vetoes by the governor.
The Senate is expected to take up the budget bill today.
After House passage of the budget bill, House Speaker Tim Armstead, R-Kanawha, left the podium for a floor speech to address critics regarding the long delay in getting a budget approved.
He noted that, even in a normal year, it generally takes the Legislature an additional week after the 60-day regular session to complete work on the budget bill.
"We are not in normal times, because of what's happened with our economy - what's happened with our energy industry," Armstead said, adding that the process was extended further when Tomblin vetoed what the governor described as an "irresponsible" budget plan on June 8, objecting to its use of nearly $182 million in Rainy Day emergency reserve funds to close the budget gap.
"I don't think it's irresponsible, as some have said, the budget we passed that took the Rainy Day money," Armstead said.
Nelson described the compromise 2016-17 budget bill as balanced, and "the most structurally sound budget we have to date."
However, House Democrats argued that the plan does nothing to address ongoing structural problems with the budget, and merely puts off dealing with critical problems for another year.
"We needed either to cut more, or we needed to raise more revenue. We did not accomplish that," said Delegate Tim Manchin, D-Marion. "There is no pot of gold, there is no magic answer coming after November. I fear what this budget really means is we'll have unprecedented layoffs and cuts next year."
The special session will continue for at least one more day, as a number of bills remain pending, including bills that Tomblin added to the special session call on Monday. That includes a bill Tomblin promised to introduce upon passage of the tobacco tax to create a $15 million fund to help alleviate the impact of pending PEIA premium increases for retirees and active state and public school employees.
Also Monday:
n The Senate passed 32-0 and sent to the House a supplemental appropriations bill to provide $2.17 million to the Boone County Board of Education, funding needed to help the school board make June payroll in light of plunging property tax collection in the county resulting from multiple coal company bankruptcies (SB 1010).
n The Senate passed 29-3 and sent to Tomblin a bill giving the governor authority to pay principal and interest on debts to assure the state would not default on bond issues in the event of a future government shutdown (HB 116).
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220, or follow @PhilKabler on Twitter.