Acting Gov. Earl Ray Tomblin proposed cutting the sales tax on food and giving teachers and state workers one-time incentive payments in the budget proposed Wednesday for the upcoming fiscal year.
Around $4.377 billion in the spending plan relies on general tax revenues and lottery proceeds, marking a modest increase from $4.286 billion in the current budget year that ends June 30. It would also avoid dipping into the state’s so-called rainy day fund while still giving a bit of help to West Virginians.
Contrasting that proposal are the likely tax hikes, program cuts and employee layoffs facing a number of other states. Recession-related budget shortfalls for the upcoming fiscal year total nearly $140 billion among the states, according to the Center on Budget and Policy Priorities, a Washington, D.C., think tank.
“We have hard working families who are struggling to pay the bills. We have seniors who have seen their cost of living rise and struggle to have adequate food,” Tomblin said during his state of the state address. “Our citizens have suffered and it’s time to give something back.”
Tomblin’s proposal would cut the sales tax on food to 2 percent from 3 percent — trimming $26 million from state revenue.
“It is this type of broad tax relief that will help our working families, our seniors and all those trying to make ends meet,” he said. “Every little bit counts.”
Cutting the sales tax isn’t a priority for House Finance Chairman Harry Keith White. He doesn’t support cutting revenue by 25 percent and suggested the tax remain.
“That’s a broad-based tax,” said White, D-Mingo.
White likewise criticized Tomblin’s proposal to allow the unemployment compensation program to borrow up to $20 million from the rainy day fund.
“I think there’s money in other accounts,” White said.
Teachers, school employees and state workers would get cash as well.
Teachers would receive one-time “enhancement” payments of $800. Other school workers would get $500 and state workers would get 2 percent of their pay, with a minimum of $500.
“Frankly, it should be more and we all need to continue to strive for a day when our teachers are paid at a rate equivalent to the most important role they play in our children’s lives,” Tomblin said. “Our state employees and school service personnel have stepped to the plate and worked hard during these tough economic times.”
West Virginia Federation of Teachers President Judy Hale said it’s promising that Tomblin mentioned teacher’s a pay, but said his proposal isn’t enough.
“We’re losing teachers on every border. We can’t put certified teachers in the classrooms,” Hale said. “Until we make a serious commitment in terms of money ... we are not going to be able to staff our classrooms.”
Tomblin’s budget does not call for significant cuts nor any layoffs and would not dip into the state’s $632.9 million rainy day fund. It likewise does not include any federal economic stimulus money, which the state has relied on for the past three budget years.
Tomblin said West Virginia remains in better fiscal condition than many states because of actions such as shoring up the teacher’s retirement system. As a result, his budget lowers payments to teacher’s retirement by more than $17.7 million during the fiscal year that begins July 1.
“The choices we have made during the past several years have allowed us to weather this economic storm better than most states,” Tomblin said. “Together we made the tough decisions, tightened our belt and we are the better for it.”