- Associated Press - Tuesday, May 24, 2016

CHARLESTON, W.Va. (AP) - The West Virginia House of Delegates killed a key tax hike on cigarettes and other tobacco products Tuesday, blowing up negotiations between the GOP-led Legislature and Democratic Gov. Earl Ray Tomblin in a critical budget session.

The 44-55 vote, which occurred on the seventh day of the Legislature’s budget session, drew opposition from both hard-line Republicans who were against tax increases and Democrats, some of whom thought the tax hike wasn’t big enough.

The result leaves lawmakers with big problems and a short timeline: No other tax hike seems to stand a chance, so the likely alternative is taking a huge swipe into state savings, which is all but guaranteed to draw a veto from Tomblin.

Tomblin said Tuesday he’s willing to take only a “few million dollars” from the state’s rainy day fund. He fears another raid of that cash could produce another bond downgrade and would only patch the problem for a year.

GOP House budget chairman Del. Eric Nelson, who supported the tobacco tax increase, said that without the tax, the budget is likely to pull $135 million from those reserves.

Without a budget in place, the state will go into a government shutdown July 1. A $270 million budget gap remains, and the tab for the special session - which is further complicated by an election year - is running $35,000 a day.

“It’s obviously been our goal from Day One to resolve this during this session,” said House Speaker Tim Armstead, R-Kanawha, who supported the tobacco tax increase. “I think we can do that, but I think it’s going to require additional discussion, and truthfully, it’s going to have to take additional involvement by the governor.”

Armstead’s criticisms centered on House Democrats opposing a tax increase that their party’s governor introduced. Only one of the 36 Democrats in the 100-member House voted for the bill.

“If we pass a 45-cent tax today, it will be at least a decade before you see any other increases on tobacco,” said Del. Don Perdue, D-Wayne. “They will own us for another 10 years. That’s where we’ve been.”

Tomblin responded that it’s Armstead’s majority to lead.

“As I recall, he’s the speaker of the House,” Tomblin said. “You get there on behalf of the majority of the votes. That’s called the majority party. The majority leads. That’s what we’re looking for.”

The defeated bill would have raised taxes on cigarettes by 45 cents a pack, to $1. It would have also increased taxes on other tobacco products. The tax hikes were expected to raise about $76 million annually. The measure would have shuffled $43 million toward averting the worst of the $120 million in cuts planned for public employee, teacher and retiree health benefits.

A similar version of the bill squeaked by in a 17-16 Senate vote.

Though one-quarter of the House signed a pledge opposing tax increases in almost all circumstances, 11 of those 25 delegates voted for the bill.

Last week, Del. Pat McGeehan, R-Hancock, called a closed-door meeting with the Democrats to discuss a coalition against the tax.

Then Tuesday, Armstead sent McGeehan and Republican Del. Mike Folk, another member of the anti-tax Liberty Caucus, letters excluding them from the Republican Caucus for the rest of session.

“I feel I’ve done all I can in my control to prevent this damaging tax on the poor,” McGeehan said.

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