The Register-Herald, Beckley, West Virginia

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November 20, 2009

Instead of tax cuts next year, Tomblin sees belt-tightening

By Mannix Porterfield

CHARLESTON — Dwindling revenues in the throes of a recession are putting cold water on hopes for cutting West Virginia’s taxes in the 2010 session, Senate President Earl Ray Tomblin suggested Friday.

Tomblin said the Legislature needs to keep trimming the corporate net, franchise and food taxes in “a responsible manner.”

Yet, lacking any ideas put forth by the Tax Modernization Project, the Senate leader indicated wholesale tax reductions likely are out of the question.

That project was announced by Gov. Joe Manchin in his first term to research the tax code for potential reforms.

“Obviously, we’re looking at a not too bright future,” Tomblin, D-Logan, told reporters after the four-day special session ended. “Revenues are predicted to not be where we had expected. We have to do a little bit of belt tightening.”

Already, the Manchin administration has cautioned that revenues could plunge as much as $100 million below estimates.

“As far as any kind of tax reduction, I would not anticipate that in an upcoming session,” Tomblin said.

Senators refused to accept a House bill giving school boards a one-year moratorium in making Other Post-Employment Benefits to retirees.

Instead, Tomblin named a special ad hoc panel of senators to study the $7 billion OPEB debt and look for resolutions. He expects members to start work on the issue after Thanksgiving.

Tomblin felt the four-day session achieved some progress, notably in rescuing some 50 cities across the state from failed police and fire pension funds.

The plan calls for a freeze on those funds and letting cities voluntarily amortize them over a 40-year period. A second fund would be set up for new hires.

“Hopefully, this will get them on the road to recovery,” the Senate president said. “It’s been a tough issue for the last two years to get a compromise worked out, but we finally did it.”

Tomblin said he was pleased lawmakers agreed to open the gates so the Division of Highways can tap into $27.3 million left over from a transfer two years ago of $40 million from the general revenue account.

The idea is to apply that money to neglected secondary roads.

“This will pave many miles of roads in West Virginia, especially ones that people drive to work on every day,” he said.

— E-mail: mannix@register-herald.com

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