- Associated Press - Monday, February 27, 2017

CHARLESTON, W.Va. (AP) - Gov. Jim Justice on Monday unveiled a revised budget plan to close the projected $500 million state deficit by raising taxes on sugary soft drinks and cigarettes, revising pension contributions and reducing previously proposed fractional sales and corporate tax hikes.

The new Democratic governor called again for major highway reconstruction to boost the state economy, funded by bonding seeded with revised taxes and fees. He repeated that it would create 48,000 jobs.

“It’s a pathway with less pain, a pathway to prosperity with less pain,” Justice said. He’s not opposed to further cuts in state government, which lawmakers are advocating, but he’s against cuts that would cripple the state, he said.

In a joint statement, the Republican leaders of the House and Senate said they were glad Justice heard concerns about his initial proposals and is open to alternatives. Senate President Mitch Carmichael and House Speaker Tim Armstead said they agree that additional cuts are needed and noted lawmakers have started working on major tax reform proposals intended to spur the economy.

Both previously criticized the governor’s proposed tax increases while voicing support for broadening the state sales tax to various services that are currently exempt.

Justice said Monday he doesn’t believe the state is ready for lawmakers’ latest proposal to replace the state income tax with a broad-based consumption tax, effectively raising the sales tax from 6 percent to 8 percent and taxing many services as well as goods. It would be “too big of a lean” on people with modest incomes or who are unemployed, he said.

He called Monday for raising cigarette tax by 50 cents a pack and taxing sugary soft drinks at one cent per ounce. That would raise an estimated $132 million in the coming fiscal year.

He suggested increasing the state sales tax by 0.25 percent, half his earlier proposal, and imposing on corporate revenues a tax of only 0.00075 percent, even less than the 0.2 percent he initially proposed.

Justice would partly offset his proposed $20 increase in the annual fee for license plate vehicle stickers by reducing inspection frequency to every three years. The West Virginia Turnpike toll would double to $2 while letting state residents buy an $8 pass. He would raise the state gas taxes by 4.5 cents a gallon, roughly half the 10 cents he proposed earlier.

They are putting forth their own alternatives to solve the state’s budget crisis, the legislative leaders said. “Like the governor, we agree we need to think big to solve our budget crisis.”

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