From the Well | January 12, 2024

At the center of the West Virginia state Capitol is an area known as The Well.

It is the informal gathering place for lobbyists, reporters, constituents and lawmakers.

Centrally situated between the chambers of the House of Delegates and Senate,

The Well is where information is often shared, alliances are formed, and deals are made.

86th West Virginia Legislature

State Capitol

January 12, 2024

West Virginia News Headlines

every morning?

·     STRONG REVENUE: Acting Secretary of Revenue Larry Pack told the House of Delegates Finance Committee on Thursday that the state has a strong revenue stream.

·     PROPOSED PAY INCREASE: State government employees could see a 5% pay increase.

·     HEALTH: A House of Delegates committee advanced legislation on Thursday.

Acting Secretary Pack said Governor Jim Justice asked for a flat budget, but the FY 2024 budget is $4.871 billion, and the bill contemplates an increase to $5.222 billion for FY 2025.

Secretary Pack said the key change resulting in the increase is the proposed pay raise for state employees totaling $123 million that is needed for their increased PEIA costs and to be competitive.

Other recommendations include:

·     $50 million for congressional earmarks that require local matches;

·     $50 million for smaller floods that don’t qualify for federal relief funding;

·     $50 million for contract nursing services;

·     $21 million for additional costs for Medicaid programs;

·     $4.6 million for the Office of Chief Medical Officer;

·     $30 million for Tourism;

·     $3 million for Veterans;

·     $21 million for Corrections.

“These are the big-picture items,” Acting Secretary Pack said.

Expenditures of unappropriated funds of $400 million include:

·     $150 million for School Building Authority;

·     $5 million to the School Building Authority for charter school seed funding for start-up expenses and for charter schools with physical buildings that are usually old schools needing renovations;

·     $50 million for Sharp/Bateman nursing expenses;

·     $30 million for the nursing workforce expansion initiative.

For funds available, usually in August, after this fiscal year is over, the Governor’s “back-of-the-budget” recommendations, in order of importance to the Governor, include:

·     $10 million for Senior Services Centers’ physical facilities;

·     $10 million for additional Senior Centers services;

·     $5 million for the Military Ascend Program;

·     $10 million for Communities and Schools Initiative;

·     $100 million for rural hospitals upon making application for funding;

·     $30 million for state parks;

·     $50 million for an agricultural lab at West Virginia State University in Institute.

Michael Cook, Budget Director, reminded the Committee that there is a distinction between the budget bill and the budget. The budget is accessible online at BudgetWV.gov .

Asked by a Delegate about one-time expenditures not typically being in the budget, Cook responded, “One time is not common, but it’s also not uncommon. It’s been done in the past.”

He said it covers the cost without committing to an ongoing cost.

Delegate Larry Rowe of Kanawha County asked what would happen if there is not enough surplus for the “back-of-the-budget” items. Acting Secretary Pack responded that those appropriations simply would not be made and that the Legislature can change the order.

Secretary Pack told the Committee that revenues are up, and he sees room for one-time expenditures in the Governor’s budget.

Acting Secretary Pack said one proposal, a child-care tax credit, mirrors the federal child-care tax credit. He also noted a budget proposal for eliminating personal income tax on Social Security benefits. He said West Virginia is an outlier among states, and 39 states do not tax Social Security benefits. Such a change would amount to a $37 million annual tax cut.

After pointing out $300 million to $400 million left over from last year on the revenue side, he turned the meeting over to Mark Muchow, Deputy Secretary of Revenue, to provide an overview of the state’s income.

Mr. Muchow pointed out that he sees continuing growth in revenue and little to no inflation. Energy prices are much lower in part due to decreased inflation, but production is up. Natural gas prices are currently down by 80%.

Describing it as the “big news,” Mr. Muchow said the “tightening cycle in federal monetary policy is ending, and the feds are talking about reducing interest rates.” Inflation is currently at about 3.4%.

Some highlights include:

·     Strong general revenue collections;

·     $457 million in federal highway money came to West Virginia last year;

·     Manufacturing exports are up with $3.9 billion in value of West Virginia-manufactured goods;

·     New technologies have slowed electric-power production in West Virginia; only 17% of electricity in the country is powered by coal with natural gas being a much higher percentage;

·     Although West Virginia is the fourth largest gas-producing state, severance tax revenue from gas is far more volatile than coal revenue;

·     In 2023, there was $595 million more collected in various tax categories than in the previous year;

·     Severance taxes, which Mr. Muchow described as being “all over the place,” are projected to bring in $313 million this year and will provide record revenues for state and local government;

·     County property taxes are up about 14%, and the real estate market is solid;

·     Tobacco taxes are going down as a revenue source around the country, including West Virginia.

The outlook shows continued growth and labor expansion. Mr. Muchow added that the labor force in the Eastern panhandle, Morgantown, and Charleston is equal to or greater than the national average. As a comparison, he said the labor force rate in McDowell County is 20%.

Concluding his remarks, Mr. Muchow said wages are going up because employers are paying more, consumer spending is rising, and income tax cuts are still being phased in. He added the state is closely watching the potential of a federal budget shutdown at the end of the month.

Staff Attorney Mark McOwen concluded the meeting by reviewing the budget and estimated revenues.

State Budget Director Michael Cook provided an overview of the Governor’s budget proposal. Click here to read more from WVMetroNews.

Key points included a proposed 5% pay increase for state employees; funding for one-time expenditures, such as congressional earmarks and flood relief; additional Medicaid costs; funding to address the backlog at the medical examiner’s office; and adjustments to corrections staff compensation.

Supplemental funding proposals included money for charter schools, nursing services, and for the continuation of the registered nurse training program.

In the surplus section, proposals were made to fund DHHR medical services, tourism, senior centers, expanding the Ascent program for veterans, crisis pregnancy centers, infrastructure projects, and replacing the agricultural testing lab.

Questions were asked about various line items and whether they could become ongoing expenses. Concerns were raised about representing supplemental requests accurately and ensuring funding is used as intended.

In the afternoon, Mark Muchow, Deputy Cabinet Secretary, Department of Revenue, gave the Committee an overview of the state’s economic situation. He noted continued growth in most sectors but lower energy prices than in previous years. He also reviewed revenue collection trends for various taxes over time.

Personal income tax collections were down 13.3% due to tax cuts, but wage growth has remained strong, Mr. Muchow said. Sales tax collections are projected to increase modestly. Severance tax collections saw record highs in 2022 but are projected to decrease significantly due to lower energy prices. Corporate income tax saw major growth recently but is expected to soften. Tobacco tax revenues continue declining annually as cigarette use decreases.

When asked about projections for severance taxes, Mr. Muchow said the agency uses forecasts from various sources. Regarding the motor fuel tax rate, he said it recently dropped slightly but will remain the same for now. He also clarified that the upcoming property tax credit is built into personal income tax projections. In closing, Muchow said revenue growth will depend on expanding the state’s labor force participation rate.

Click here to read more from WVMetroNews.

House Bill 4274 renames the former Department of Health and Human Resources, reflecting the division of DHHR into three new entities: Department of Human Services; Department of Health; Department of Health Facilities; and the Bureau of Senior Services.

The bill provides statutory clean-up, revises incorrect code expiration dates, and makes other clarifications in legislation adopted in 2023.

An additional amendment, adopted by the Committee, cites the Department of Human Services as the state entity authorized to cooperate with the United States Department of Health and Human Services and United States Department of Justice in extending and improving child welfare services and as the agency responsible for spending federal funds provided to the state for these purposes.

House Bill 4595 expands the powers and duties of the Legislative Oversight Commission on Health and Human Resources (LOCHHRA).

The legislation provides LOCHHRA authority to investigate if it enters into executive session for “limited” reasons, such as matters regarding Child Protective Services investigations.

Using language similar to the state Ethics Act, the closed sessions are narrowed to matters that, if made public, could harm the reputation or professions of the persons involved.

In response to a Committee member’s questions, the matters discussed would not be subject to the state’s Freedom of Information Act (FOIA) or open to the public.

Committee counsel noted that all legislative committees are empowered to hold closed sessions.

Members didn’t inquire whether LOCCHRA could meet during an ongoing investigation by CPS or another entity or entities having jurisdiction.

She said the intent was not for less transparency. Rather, Delegate Tully said, intent was to secure information to guide policymaking by legislators.

Delegate Mike Pushkin of Kanawha County noted the Committee-adopted measure was better than the bill as introduced. He said he hoped that investigatory provisions won’t be “abused.”

Both Vice Chair Heather Tully of Nicholas County and Chair Amy Summers of Taylor County reiterated the bill’s legislative intent was to empower the Committee to secure information to better inform policymaking.

The purpose of House Bill 4593 is to ensure that West Virginia First Foundation’s meetings comply with state open-meetings laws as well as state FOIA statutes.

Delegate Ric Griffith of Wayne County asked whether the Foundation could reimburse Emergency Medical Services providers for attending to persons who overdose on opioids. The Foundation’s purpose is to distribute federal funds the state received due to the Opioid usage.

Chair Summers said the Commission has yet to appoint an Executive Director or determine how to distribute funds.

House Bill 4433 is intended to exempt mobile facilities that perform mammography or low-density computerized tomography from having to secure a medical entity Certificate of Need.

In response to a question by Delegate Griffith, Committee counsel said the services could be provided by out-of-state providers, such as the University of Kentucky, The Ohio State University, or facilities in neighboring states. He questioned whether such an arrangement would entice some state residents to seek medical care outside the state.

Vice Chair Tully noted those services appeal to persons who do not have reliable transportation or who may be more comfortable, due to work schedules or personal choice, to receive mobile services now provided by in-state health facilities.

According to Vice Chair Tully, low-density computerized tomography is used to screen for lung cancer.

20th Day: January 29, 2024 — Submission of Legislative Rule-Making Review bills due

35th Day: February 13, 2024 — Last day to introduce bills in the House. House Rule 91a does not apply to originating or supplementary appropriation bills, and does not apply to Senate or House resolutions or concurrent resolutions

41st Day: February 19, 2024 — Last day to introduce bills in the Senate. Senate Rule 14 does not apply to originating or supplementary appropriation bills and does not apply to Senate or House resolutions or concurrent resolutions

47th Day: February 25, 2024 — Bills due out of committees in house of origin to ensure three full days for readings

50th Day: February 28, 2024 — Last day to consider bill on third reading in house of origin; does not include budget or supplementary appropriation bills

60th Day: March 9, 2024 — Adjournment at midnight