Budget gap bills moving forward in Legislature
CHARLESTON, W.Va. -- One of several Tomblin administration bills intended to help close a $146 million gap in the proposed 2014-15 state budget is on the agenda for the Senate Transportation Committee Tuesday, Jan. 21.
Under current law, sales taxes paid by contractors for materials used in state highway construction or maintenance projects goes to the Division of Highways to fund future road projects.
A Tomblin administration bill (SB334) would instead put those tax collections into the state's General Revenue fund for the 2014-15 and 2015-16 budget years.
That's estimated to amount to $13 million each year, state Budget Director Mike McKown said Monday.
"It's just another thing to keep us together for the next couple of years," McKown said.
The state's long-term budget forecast predicts tough fiscal years this year and next, but with increasing revenue collections that point to future budget surpluses, beginning in 2017.
While the state Division of Highways is struggling to keep up with costs for new roads and maintenance of existing highways -- consultants last year said the state would need to nearly double the division's $1 billion annual budget to complete and maintain all state road projects -- McKown said it makes sense to tap into Highways' budget in the short term.
"The thought being that the Road Fund is actually running above estimate," he said. "It's the General Revenue fund that's kind of hurting."
For the first six months of the 2013-14 budget year, Road Fund collections are running 5 percent ahead of estimates, led by vehicle privilege tax collections -- the state sales tax paid on vehicle purchases -- that are coming in 10 percent better than projected.
Through Dec. 31, the Road Fund has collected $373.2 million, $18.57 million above estimates.
McKown said SB334 is the first of several bills the administration will sponsor to come up with about $48.3 million to close the state budget gap. Others would:
-- Terminate the Strategic Research and Development Tax Credit retroactively to Jan. 1.
Eliminating the tax credit equal to 3 percent of a company's R&D expenditures is projected to save $1 million in the current budget, and up to $4 million a year thereafter.
The credit was created in 2002, as part of several initiatives by then-Gov. Bob Wise to spur economic development in the state.
Endorsing the tax credit in his 2002 State of the State address, Wise said, "We have never had a serious effort in West Virginia to encourage research and development. This, too, must change."
-- Continue a suspension of General Revenue fund transfers to the state Public Port Authority for two more years, providing $4.3 million a year.
-- Move up the due date for bimonthly remittances of sales tax collections for larger businesses and retailers, so that payments that normally would be due in July will come in at the end of the 2014-15 budget year, in June.
That one-time shift would bolster fiscal 2014-15 tax collections by about $30 million, according to the state Budget Office.
Tomblin officials are also planning to transfer $12 million from the Abandoned and Unclaimed Property Fund to general revenue. That transfer does not require legislative action.
Reach Phil Kabler at email@example.com or 304-348-1220.