After Term Fraught with Fiscal Challenges, Tomblin Leaves Budget Plan Lawmakers Can't Back

For the past six years each January, Gov. Earl Ray Tomblin has returned to the chamber where he began his political career to address members of the Legislature, Board of Public Works, Justices of the Supreme Court and citizens of the state of West Virginia.

He once again stood at the podium in the House of Delegates Wednesday, this time not to give a gubernatorial State of the State Address, but to say goodbye to his colleagues and constituents.

“It has been the honor of my life to be your Governor, to be West Virginia’s Governor,” Tomblin said.

“Joanne and I thank the people of West Virginia for your abiding trust, counsel and support and we look forward, with the greatest hope and optimism, to an even stronger West Virginia.”

In the farewell address, Tomblin recounted his accomplishments during his time in the Governor’s Office. He highlighted his work to strengthen the state’s education system, combat substance abuse and diversify the economy in the wake of the coal industry’s decline.

That decline has had far reaching impacts, including devastating reductions in state tax collections. Tomblin’s reactions to those declining revenues are likely what he will be most remembered for.  

“Throughout my 42 years in public service, fiscal responsibility has been at the heart of every project I’ve undertaken, every policy I’ve fought for and every decision I’ve made,” he said.

Over the past five years, Tomblin, and the Legislature, have reduced the state’s budget by more than $600 million, but those reductions still aren’t enough.

During the upcoming fiscal year, lawmakers will have to fix a more than $400 million budget gap. Tomblin presented legislative leaders with a plan to fill that hole Wednesday.

“I present you today with a budget that is balanced, but a budget that requires difficult decisions and thinking about the next generation rather than the next election,” he said.

Those difficult decisions, according to Tomblin’s plan, are increasing taxes while continuing cuts.

Although only ceremonial, Tomblin’s budget proposes raising the state’s consumer sales tax by one percent to bring in an additional $200 million each year. He also proposes getting rid of a tax exemption on cell phone bills. That would bring in another $70 million annually.

Those tax increases are on top of the continuation of mid-year budget cuts he put in place in November.

But increasing the sales tax and closing the telecommunications loophole, those are things Tomblin proposed during the 2016 legislative session- things that lawmakers didn’t have an appetite to do then, and newly elected Senate President Mitch Carmichael said Wednesday they don’t have an appetite to do now.

“It’s more taxes in an environment in which the citizens in West Virginia are suffering to a greater degree than any other state in the nation,” Carmichael said after the speech.

Carmichael and House Speaker Tim Armstead have both said they do not believe tax increases will succeed in either chamber, and incoming Gov. Jim Justice has pledged not to raise taxes either, but many state agency heads have testified before lawmakers that continued cuts will result in layoffs.

Armstead said he believes there is still room for reductions and efficiencies, but when it comes to layoffs he doesn’t “think you can take that off the table.”

“Realistically, when you have $400 million less to spend, the two choices are raising taxes or making cuts,” he said, “and if you are going to make $400 million in cuts, it’s going to be hard to continue at the level we have at every agency. That just isn’t realistic.”

Carmichael was careful to say he’s not prepared to lay off state workers, but is prepared for what lawmakers must do to deal with the effects of a poor economy.

Tomblin seemed to recognize those realities in his address and urged lawmakers to consider his plan in order to avoid the financial hardships he’s seen in the state’s not-so-distant past.

“I understand these taxes will not be easy, but asking people to pay a few dollars more now is a far better choice than seeing PEIA cards not accepted by medical providers,” he said, “or going back to the days when we couldn’t finance school or road improvements or even pay the gas bill at the Governor’s Mansion.”

Tomblin’s legacy as he prepares to leave that mansion next week is one fraught with tough fiscal challenges, challenges that aren’t leaving with him.

The incoming Justice administration will face the same financial tests, at least initially, as his team prepares a budget to present to lawmakers during his first State of the State Address, on Feb. 8.