- Associated Press - Tuesday, June 13, 2017

CHARLESTON, W.Va. (AP) - West Virginia’s Senate voted Tuesday to fund “essential” personnel and services while protecting the benefits of other state workers facing furloughs if the new fiscal year starts July 1 with no budget adopted.

The Senate’s 29-2 vote followed House passage last month of a furlough measure with some different language. The House later rejected the changes. The bills would have to be reconciled and signed by the governor to take effect.

Meanwhile, talks appeared to falter again Tuesday at the Capitol aimed at closing the budget impasse among lawmakers and Gov. Jim Justice.

Senate Republicans meeting with House counterparts in a conference committee on tax legislation declined to sign the committee report on Tuesday, saying it didn’t reform the state’s income tax system.

“Without meaningful tax reform, the only option that remains is to pass a budget that spends only to the revenue line we are provided by the governor, and make significant cuts to live within our means,” Senate Majority Leader Ryan Ferns said. The senators have been willing to compromise, but they’ve been left without other options, he said.

The Senate on Tuesday night voted 22-12 to adopt a $4.225 billion general revenue budget that Ferns said would cut state support for higher education by almost $34 million and Medicaid by $34 million, which would cost West Virginia another $102 million in matching federal support for health care for poor residents. Several Senate Democrats criticized the cuts, calling them “draconian.”

The Republican-controlled House has twice rejected legislation passed by the Republican-controlled Senate and backed by Democratic Gov. Jim Justice to cut income taxes while raising the sales tax. The governor has since lowered both the proposed income tax cuts and sales tax increase.

However, the latest House-backed proposal that emerged Tuesday from the conference committee would leave income tax rates unchanged. It would exempt military retirement pay and most Social Security benefits and raise the tax credit for people with incomes under $100,000. It would leave the sales tax at 6 percent, not raising it to 6.35 percent, which was Justice’s latest proposal to help limit state spending cuts.

Also Tuesday, the House Finance Committee amended then advanced a road reconstruction bill backed by Justice and approved by the Senate. It would increase the variable minimum gas tax by 3.5 cents a gallon, raise the sales tax for selling a car from 5 to 6 percent and increase other state motor vehicle fees, expected to raise almost $140 million in the coming year for road repairs starting in July. The committee stripped from the bill an additional 1.5-cent flat gas tax.

The additional funds would also support possible bonding for a major reconstruction program that’s subject to voter referendum expected in August. That’s the centerpiece of Justice’s economic development program. He says it will create thousands of jobs.

The House Finance Committee also advanced a $4.28 billion general revenue budget bill, Majority Leader Daryl Cowles said.

House Speaker Tim Armstead said Tuesday evening that he believes they are making progress. He added that the Senate has been “unwilling to recognize” that some things they want “are simply not going to cross the finish line.”

The Legislature has been meeting in a special session for 17 days so far, trying to pass budget and tax legislation after approving a $4.1 billion general revenue budget at the close of their regular two-month session that Justice vetoed. He said it cut too much from higher education, Medicaid and other programs. The state’s tax revenue projections for the coming year have improved somewhat since.

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