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WVCBP: Prison, education, severance tax reform likely on tap for budget talks

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With the West Virginia legislative session just on the horizon, one of the most certain changes that will affect every West Virginian will be the governor's budget.

The governor's staff takes great steps toward putting together line-by-line how the government will spend its money. The non-governmental organization West Virginia Center on Budget and Policy will then dedicate much of its analysts time to scanning and interpreting that budget.

While the session has yet to begin, WVCBP executive director Ted Boettner said his organization is already anticipating to see some things in the budget. For one, he said, the WVCBP is expecting a deficit of at least $100 million that will have to be overcome with spending cuts.

The governor's proposed budget will be presented in mid-February. The legislature will then work with that budget until something satisfactory is produced, usually in an extended, special session.

"Nothing will be clear until the governor's budget comes out in February when we know what the revenue estimates are going to be and what's laid out in the governor's budget," Boettner said.

While it's sort of a guessing game at this point, Boettner said the WVCBP does have a few predictions of what budget-related issues might be on tap this session: prison reform, education reform, severance taxes and dealing with lost revenue from tax breaks granted in the recent past.

"I think there's going to be a lot of talk about future severance taxes and our ability to pay for the important programs like Medicaid that serve about 200,000 children in West Virginia," Boettner said. "I also think there will be a push to look at the tobacco tax as a long-term way to help deal with Medicaid funding."

Boettner said higher education might see additional budget cuts, which he said could cause tuition prices to go up. Boettner warned against this measure because it could reduce the amount of promising students who stay within state borders over the long term.

High on Boettner's own wish list is the funding of a legislature-created program that would form a quality rating system for child care in the state. Though it was approved, it is unfunded.

"We know that in those early years it is so important to developing young kids, and you can't really blame teachers if those kids had problems early on and then come to the classroom," Boettner said. "We need to fully fund that. It would go a long way toward improving our education system and giving our kids the chance to become productive citizens, earn more and be better citizens."

The WVCBP has also been strongly advocating for the creation of a future fund filled with collections from severance taxes on state natural resources. The money could be stored away and used for purposes such as economic diversification.

Much of the budget process, Boettner said, will fall in the hands of the governor.

"The budget process in West Virginia is a very closed process in a lot of ways. A lot of meetings aren't open during the year that you can attend," he said. "The power of the executive is so powerful in West Virginia — he has a line-item veto — so anything the legislature wants to add to the budget or change, the governor has full power to veto that."

A governor's veto on budget item, Boettner said, is rare in West Virginia.

Boettner said he thinks Tomblin and former Gov. Joe Manchin so far have done a good job of paying down long-term liabilities and prudently managing the budget. The problem now, he said, is that a slew of business tax cuts from the last five years are about to come into full effect.

"I think if you're going to enact tax cuts, business tax cuts or reduce the food tax, you need to find the revenue to replace that if you're going to do that," Boettner said. "Or, you'll end up exactly where we are today — with budget deficits because we don't have the revenue to meet the needs of the people of our state and its children."

In one example, Boettner said about $150 million will be lost to the elimination of the food tax.

"It's not that (phasing out the food tax) was a bad thing, it's just that you have to replace that revenue or you're going to have budget problems," Boettner said.

Ultimately, Boettner said, he hopes the governor's budget will take a balanced approach to spending and taxes as well as focus on the state's fiscal health and employment.