By Phil Kabler For The West Virginia Press Association
As it did in 2017, the 2018 regular session of the Legislature got underway Wednesday with an unscripted, unconventional State of the State address from Gov. Jim Justice.
Justice’s 49-minute address to a joint session of the House and Senate in House chambers included references to Frankenstein, ringworm, and lines at the Dairy Queen, and also featured two whiteboards and a variety of props, including a several silver platters, homage to Justice’s infamous budget veto last summer.
This time, instead of containing bull manure, much to the displeasure of legislators, the platters presented to legislative leaders Wednesday in a show of good faith included a giant Hershey’s Kiss, a blue and gold boutonniere, and an 8-track tape titled, “Happy Days.”
Likewise, instead of requesting some $400 million in tax hikes to close a nearly $500 million budget deficit, as he proposed in 2017, Justice on Wednesday told legislators: “My request for a tax increase would be zero. Zero,” holding his hands aloft to form a zero.
Justice’s whiteboards showed that where the six-year budget forecast last year projected growing shortfalls each year, the current six-year forecast shows every year in the black.
“You can’t fathom how dire it was, and you can’t imagine how promising it looks,” Justice said of the change.
Justice’s budget advisors cited a number of factors for the dramatic turnaround in the state’s financial picture, including a 60 percent increase in natural gas prices, stabilization of coal markets, and modest growth in private-sector employment, led by a jump in construction jobs.
Combined by strong 15.8 percent growth on state investments, and $163 million of Medicaid funding that was appropriated but not spent, and the state’s financial picture has gone, at least temporarily, from crisis mode to stability.
Two key provisions in Justice’s State of the State address Wednesday were relatively unchanged from his 2017 address: Increasing the budget for the state Development Office by $35 million, and significantly increasing state spending for tourism promotion. Last year, legislators soundly rejected both proposals, while slamming the door on Justice’s proposed tax hikes. This year, the two development initiatives are getting a warm reception from the Legislature. As Senate President Mitch Carmichael, R-Jackson, said of the change of attitude, “A year ago, we were in a $500 million budget crisis. There’s more of an appetite to consider these things this year.”
House Finance Chairman Eric Nelson, R-Kanawha, said another important difference is that Commerce Secretary Woody Thrasher and Development Office Director Kris Hopkins have earned the trust of the Legislature in the past year. “They have validated their credentials and demonstrated some real successes,” Nelson said, adding, “It’s just a matter of better understanding the opportunities that are available, and where we can get a better bang for our buck, so to speak.”
Justice is also proposing 1 percent pay raises for teachers, school service personnel, and state employees, as well as a $6,000 salary increase, phased in over three years, for correctional officers at critically understaffed state prisons, regional jails, and juvenile facilities.
Also, on Wednesday, instead of proposing tax increases, Justice called for a seven-year, $140 million phase-out of personal property taxes on business inventory, equipment and machinery, a tax Nelson called the single biggest hindrance to bringing economic development and jobs to the state. Currently, the revenue goes to counties, primarily to support public schools.
Justice on Wednesday pledged that counties will be made whole, without giving specifics, saying, “One thing we’ve got to insure is that education, and our counties and cities won’t get hurt. We can do that. We can absolutely do that with this.”
The proposal, which would require voters approving a constitutional amendment on the November general election ballot, drew a strong round of applause from legislators. That prompted Justice to comment, “If you all don’t quit this clapping, we’re going to be here all bloomin’ night.”
The 60-day regular session continues through March 10. Unlike the past two years, when budget impasses have kept the Legislature in extended session into June, Nelson said he’s optimistic the budget bill can be passed this year during the regular session.
To that end, he’s advocating that the House and Senate pass any bills that require funding by the 45th day of the session, providing a cushion to include those changes in the budget bill during the final two weeks of the session.