By Autumn Shelton for RealWV
The West Virginia Senate has passed its version of the budget bill, and it includes a 10% personal income tax reduction, partially paid for through an additional tax on vape products, as well as a 3% average pay raise for state employees, a fully-funded higher education funding formula and a fully-funded Medicaid program.
Senate Bill 250, the budget bill, also provides additional funding for PEIA, restores funding to the Division of Arts, Culture and History, and pre-funds the Hope Scholarship Program, according to Senate Finance Chair Jason Barrett, R-Berkeley, who explained the bill on Friday.
“Two of the biggest drivers in the budget are the Hope Scholarship and Medicaid,” Barrett said of the $5.381 billion general revenue budget, adding that he believes the changes made to fund the Hope Scholarship will ensure its future solvency.
In Governor Patrick Morrisey’s introduced budget, a $5.493 billion budget, $21.54 billion was appropriated in spending authority, a 1.3% increase in additional spending compared to fiscal year 2026. This includes $338 million to fully-fund the Hope Scholarship – $230 million to be front-loaded from general revenue and $108 million to be used for the beginning of fiscal year 2028 from back-of-the-budget general revenue surplus.
However, in order to make room for the proposed 10% personal income tax general revenue loss, which Morrisey has advocated for, the Senate had to make financial adjustments – one of them being removing the governor’s $230 million in Hope Scholarship funding from general revenue, while appropriating $100 million to the Hope Scholarship Program through supplementals and $208 million from general revenue surplus – meaning the state would need to meet all of their financial obligations before the majority of funding for the Hope Scholarship would be allocated.
In lieu of this change, Senator Patricia Rucker, R-Jefferson, chair of the Select Committee on School Choice, said that she has concerns that funding for the Hope Scholarship is not in the front of the budget. But, she said she appreciates the work that has been done, and believes the bill is an “incredible attempt to provide all the things that we all care about.”
“This is a first draft. This is going to come back,” Rucker said. “And, at the end of the day, it is my hope to support a budget that we pass that is going to completely fund the Hope Scholarship and all of the necessary programs for the citizens of this state.”
As for the 10% personal income tax reduction in the Senate’s budget, Barrett explained that the governor’s bill included a built-in 5% cut, which would amount to a revenue loss of about $125 million. This meant the Senate had to find a way to offset the loss of an additional $125 million, some of which was made up for through a $22 million vape tax.
According to discussions that took place during the Senate Finance Committee meeting on Feb. 16, another large reduction that needed to be made was a $35 million cut to the Department of Health Facilities.
The Senate also included $160 million in budget improvements, including $2.8 million to cover a 3% pay raise for court employees, which was not included in the governor’s budget, funding for an Office of Entrepreneurship through the Secretary of State’s office, $546,000 to cover a proposed pay raise for mine inspectors, a restoration of funding for Save the Children, Jobs and Hope and CASA, an $8 million restoration in higher education funding, and moving an additional $121 million in Medicaid funding from surplus to the front of the budget.
Sen. Eric Tarr, R-Putnam, questioned the $386 million increase in base spending compared to last year, as well as the $103 million general revenue shortfall resulting from the 10% personal income tax cut. He said he would be a no vote on this budget bill.
“We are increasing spending and then saying we are going to reduce our income by $250 million,” Tarr said. “And, there’s a way we can get there, and we’ve proven how to do that. We’ve done it year after year after year for a while. And, the way that you do that, is you hold a flat budget where you reduce your spending and then, by that, you’re going to increase your revenue reduction, which would be a tax cut. Anyway but that, when you start going out now, especially with triggers in place that go ahead of 3%, you place us in a position in a future legislation to come back in and have to increase taxes, or do cuts that you really, really don’t want to have to cast a vote on.”
