Closing out a 17-day special session, West Virginia legislators put the final touches on a $4.187 billion 2016-17 state budget on Tuesday - including amending it to include a new reserve fund to lessen the impact of pending premium increases for retirees and public employees covered by the Public Employees Insurance Agency.
House Democrats, in particular, raised concerns that the additional funding in the budget bill (SB 1013) for employers' PEIA premiums would effectively result in pay cuts for retirees and public employees with PEIA health insurance. State law requires an 80-20 match between employer and employee PEIA premiums.
Under the provision added to the budget, for the next five years, $15 million a year in unappropriated funds in special revenue accounts would be placed into the new PEIA Stability Fund to help offset current and future premium increases.
Of that amount, $5 million would go to reduce retiree premium increases from 12 percent to 6 percent, with the remainder going to replenish the PEIA Reserve Fund, which was exhausted in 2015.
However, a companion bill (HB 123) to outline how the funds are to be transferred ran into hiccups in the House. Some lawmakers worried that letting the state's secretary of revenue take unappropriated funds from various accounts could allow future secretaries to raid funds from particular elected officials' accounts for partisan or personal reasons.
Ultimately, the House amended the bill to limit sweeps from funds held by statewide elected officials to no more than 25 percent in unappropriated funds, or a maximum of $3.75 million a year. The bill passed the House 85-4 and, shortly after, passed the Senate 28-0.
"We are gratified that, in a bipartisan fashion, we are able to help people who help us every day," said Delegate Barbara Fleischauer, D-Monongalia, who said the fund will assist "cooks, custodians and teachers," active and retired.
Gov. Earl Ray Tomblin promised to add the PEIA fund to the special session agenda once the Legislature approved his proposal for a tobacco tax increase (SB 1012), to raise $98 million to help close a $270 million gap in the 2016-17 budget. That bill passed the Legislature on Monday.
The budget bill - including the PEIA reserve fund clause - received final passage votes in the Senate 28-3 and the House 80-7.
Passage of the budget bill and conclusion of the special session, which began on May 16, became possible Monday, when the House broke a 92-day budget impasse with passage of a tobacco tax increase, including a 65-cent-a-pack hike on cigarettes, to raise $98 million a year in new revenue.
That, combined with about $120 million in spending cuts and account sweeps, and a $70 million raid on the Rainy Day reserve fund that Tomblin found acceptable - compared to a nearly $182 million raid in the budget bill he vetoed June 8 - allowed the Legislature to cobble together a plan to close a $270 million shortfall in the 2016-17 budget.
"While it's fair to say that nobody walked away from these negotiations truly happy, Republicans and Democrats in both the House and Senate were able to come together to do what is best for West Virginians," Senate President Bill Cole, R-Mercer, said in a statement Tuesday. "Gov. Tomblin's suggested 65-cent tax on tobacco products will help provide the necessary revenue to keep our government operating and ensure we are able to keep our promises to our state employees and retirees."
Tuesday's final votes on the budget were not without controversy, though.
The budget bill cuts about $14.1 million in racing-purse fund subsidies appropriated by the Legislature by $4.1 million, and creates a new line-item designating that the remaining $10 million is to go for thoroughbred racing purses only.
Sen. Herb Snyder, D-Jefferson, said it is legally and morally wrong to use the budget bill to cut greyhound racing purses. He said the cut would be a "dagger through the heart" for greyhound racing in the state, and said it might not be legal to use the budget bill to make policy changes.
"I sincerely think this will be challenged in court immediately," he said.
While the subsidy cut would affect the state's two greyhound tracks, Snyder said thoroughbred horse owners and breeders have qualms that future cuts will be aimed at them.
"There's no certainty in the live-racing business - dogs or horses - at all, and this Legislature has created that uncertainty," said Snyder, whose district includes the horse racetrack and casino in Charles Town.
"This is an attack on dogs, but something tells me when I'm gone, this attack will continue on all live racing," said Snyder, who is not seeking re-election.
Joe Moore, acting executive director of the state Racing Commission, said the cut - if it stands - would hurt, but not devastate, greyhound racing at racetrack casinos in Nitro and Wheeling.
"It looks like a 16 to 17 percent reduction when you boil it down to the track level," Moore said of the points system for greyhound racing purses.
"Anytime you take money away from purses, it doesn't help the industry, but it doesn't devastate it," he said.
Moore said the reduction in purse fund subsidies could lead the greyhound tracks to request that the Racing Commission reduce the number of live racing days at each track.
"If the dog tracks felt they had a shortage of dogs available, based on the reduction of purse money, they could come to the commission and request reduction of race days," he said.
Also Tuesday, the Legislature:
n Corrected an error in legislation to allow people convicted of first-offense simple driving under the influence to participate in an alcohol test and lock program. Because of a drafting error, the law was written to seemingly allow only those convicted of the more serious crimes of aggravated DUI and DUI causing bodily injury to participate, when those people actually are not eligible for the program (SB 2017).
n Passed a legislative-rules bill bundle removing a rule passed in the regular session that would have eliminated commercial development of industrial hemp by limiting permits to grow the product to state universities and the Department of Agriculture. That rule conformed with a bill passed in the regular session restricting industrial hemp permits - a bill Tomblin vetoed after the session ended.
n Extended a $2 million subsidy for Workers' Compensation premiums for volunteer fire departments for one year, through June 30, 2017.
Reach Phil Kabler at philk@wvgazettemail.com, 304-348-1220, or follow @PhilKabler on on Twitter.