West Virginia Governor Jim Justice’s Proposed Budget Includes Tax, Fee Increases

Justice outlines plan during State of the State Address

Gov. Jim Justice delivers his first State of the State speech on Wednesday, Jan. 8, 2017, in Charleston, W.Va. (AP Photo/Walter Scriptunas II)

CHARLESTON — Classroom teachers would get a 2-percent pay raise, highway projects including Interstate 70 in Ohio County would get completed, and motorists would pay 10 cents more per gallon of gasoline if Gov. Jim Justice’s proposed budget passes the Legislature.

Titled by Justice as West Virginia’s “Save Our State Budget,” his proposal is a mix of spending cuts, increases to taxes and fees and a $123 million withdrawal from the state’s Rainy Day Fund as the state faces an estimated $500 million shortfall for fiscal year 2018.

“West Virginia is at a crossroads … and it must be emphasized there is a crisis here,” Secretary of Revenue Dave Hardy told a roomful of reporters Wednesday during a budget briefing.

Justice’s proposal features $450.15 million raised through a half-percent increase in the sales tax to 6.5 percent; eliminating tax exemptions for professional services and advertising and raising the gasoline excise tax by 10 cents a gallon from the current 20.5 cents to 30.5 cents.

The proposed general fund budget unveiled Wednesday would increase to about $4.8 billion, with total spending, including federal and other funds, at $12.9 billion.

Later Wednesday, during his State of the State speech, Justice apologized for the proposed tax increases.

“I truly, from the bottom of my heart, hate tax increases,” he said, adding it’s “the most painless way I think you can get out of this mess. If you don’t do this, you’re dead. You’re dead beyond belief.”

All of the proposed tax increases wouldn’t be permanent. After three years, he proposes eliminating the sales tax as well as a proposed 0.2-percent commercial activities tax he wants businesses to pay.

Justice’s proposal also includes what Hardy says is a “bold and aggressive” $1.4 billion road program that shows Justice’s commitment to long-term economic growth. In addition, Justice proposes a $105 million Save Our State Fund, to be used for economic development and infrastructure investment.

The roads program “will invest heavily in roads and bridges,” and is expected to create up to 25,000 new jobs throughout the state, including temporary jobs, Hardy said.

Among the projects listed in the $1.4 billion Phase I of the program — the phase that lists projects that have passed most requirements and are ready to go — is the $135 million I-70 bridge rehabilitation and replacement project in Ohio County.

The $1.5 billion Phase II includes W.Va. 2 widening projects in Hancock, Marshall and Wetzel counties.

Those include a $10.5 million Hancock County project that widens it through New Cumberland; an $80 million project in Wetzel County from Proctor to Kent; and creates four lanes through Marshall County.

Justice considers his plan for $26.6 million in cuts as “responsible cuts,” stating alternatives could cost the state 3,000 jobs, in addition to cuts that could have eliminated all state parks and shut down dog and horse tracks, and veterans’ services.

His cuts include eliminating the eight, regional education service agencies that provide services to public schools and cost the state more than $3.5 million per year.

The services RESAs provide include training bus drivers, and hiring special needs teachers, and managing substitute teacher schedules.

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