As Ted and I noted in our FY 2016 budget report, the governor’s proposed budget would not be balanced if passed as is. In addition to requiring a transfer from the Rainy Day Fund, a number of statutory changes are also needed. The governor proposed redirecting revenue that would have typically been directed out of the General Revenue Fund by statute, and instead keeps the revenue in the General Revenue Fund to help balance the budget. Altogether, these redirected revenues would free up $24.4 million. The governor introduced four bills to accomplish the changes, and with less than one week to go in the session, let’s check on their status.
SB 266 would eliminate a sales tax exemption for certain purchases on highway projects for FY 2015. The exemption functions as a refundable credit, in effect transferring sales tax revenue from the General Revenue Fund into the State Road Fund. The suspension of the transfer would increase the General Revenue Fund by $11.5 million in FY 2016. SB 266 made it to 2nd reading before it was removed from the calendar by the Rules Committee on February 18th.
HB 2226 redirects Corporate Net Income Tax revenue from the Special Railroad Intermodal Enhancement Fund back into General Revenue. Legislation in 2013 stopped the transfer to the Railroad Fund in 2014, and HB 2226 would permanently end the transfer, keeping $4.3 million in the General Revenue Fund. HB 2226 passed the House on on March 4th and is currently in the Senate Finance Committee.
HB 2462 reduces the amount of Sales Tax Revenue that is dedicated to the School Building Authority, redirecting the revenue back into the General Revenue Fund. Currently, $5 million in sales tax revenue is dedicated to the School Major Improvement Fund, and $17 million is dedicated to the School Construction Fund. HB 2462 would reduce those amounts to $2 million and $6 million respectively, keeping $8 million in the General Revenue Fund. HB 2462 has passed both chambers and is awaiting the governor’s signature.
HB 2212 reduced the amount of Severance Tax revenue that is dedicated to the West Virginia Infrastructure General Obligation Debt Service Fund. Currently, the first $23 million of severance tax revenue collected is dedicated to the Debt Fund, and HB 2212 would reduce that amount to $22.5 million, keeping $500,000 in the General Revenue Fund. HB 2212 has passed both chambers and was signed by the governor on March 3.
So far, only two of the four bills requested by the governor making statutory changes to increase the amount of revenue in the General Revenue Fund have completed the legislative process. Without all four bills, the legislature will have to make further cuts or borrow more from the Rainy Day Fund in order to balance the budget.
We have a great newsletter, join below: