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Reject Tax Hike, ‘Rainy Day’ Raid

February 23, 2014
The Intelligencer / Wheeling News-Register

None of the proposals to balance West Virginia's budget next year is appealing. That leaves Gov. Earl Ray Tomblin and legislators in the position of picking the least objectionable among a set of bad alternatives.

As a first step, legislators should buck up and finally say "no" to the dog and horse racing industry.

Tomblin has recommended closing part of the budget gap by diverting some money now distributed by the state Lottery Commission. Lawmakers seem unenthusiastic about the recommendation, and they are right to reject part of it.

Municipalities and counties now receive percentages of legalized gambling proceeds. Tomblin wanted to reduce the payments - but that would have been imprudent as well as wrong. Why wrong? Because Wheeling and other communities that voted to allow table gambling at racetracks did so after being promised shares of the proceeds. Going back on that would be breaking a promise.

Another part of Tomblin's plan should be pursued, even accelerated. He wants to reduce state subsidies for horse and dog racing by about 15 percent. That would generate somewhere around $13 million a year for the state.

A better plan would be to eliminate the subsidies altogether - resulting in an infusion of as much as $80 million for the state budget.

Other ideas being floated at the Capitol include taking as much as $200 million out of the state's "rainy day" reserve fund.

That would be a terrible mistake. Even the $84 million withdrawal suggested by the governor should concern legislators.

Some state officials say borrowing from the reserve fund is no problem. After a couple of years of budget gaps, state finances are expected to rebound, they insist.

Really? Bear this in mind: Budget analysts -probably the same ones predicting a revenue rebound in a couple of years - were badly wrong in projections for this year. By January, revenue collections were already about $71 million below expectations. Legislators would be engaging in wishful thinking to deplete the reserve fund with the expectation of a revenue turnaround within a few years.

Lawmakers and Tomblin are between the proverbial rock and a hard place. Beyond rejecting one proposal - for as much as $200 million in tax increases - most West Virginians probably would find it difficult to offer suggestions.

Again, however, a good start would be to retain the $80 million a year now going to the dogs and horses, coupling that with a hard look around state government for opportunities to reduce spending more than the governor already plans.

 
 

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