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War of words over proposed gas tax holiday continues in Charleston

MORGANTOWN — The gas tax holiday tennis match continued on Friday, with Gov. Jim Justice taking another swing, and the two legislative leaders and the state Democratic Party each offering volleys.

The match began on Thursday when Democratic legislative leaders held a press conference and suggested that Justice pause the 37.5 cents-per-gallon tax for at least 30 days to save state taxpayers some money in the face of record-high as prices.

They estimated the cost at $35 million to the state road fund and suggested replacing the money with contingency funding or a supplemental appropriation to the road fund during the next interim session.

Justice issued a long, scathing response Thursday evening, saying he doesn’t have the power to do that unilaterally and the Democrats could have done it during the legislative session that ended on Saturday.

(Had they wished to, the bill would have had to originate in a GOP-controlled committee; the last day for delegates to introduce a bill was Feb. 15, the last day for senators was Feb. 21.)

“I would absolutely love to suspend this tax and provide at least a little bit of relief for hard-working West Virginians who are paying the price for rampant inflation and soaring energy costs. However, I cannot legally suspend this tax; only our Legislature can.”

Justice said in that statement, “The answer is this is nothing but a political stunt, designed to get their names in the headlines and make me look like the bad guy.” He made references to the Democratic DC mothership whose polices led to the high prices and war in Ukraine.

He repeated some of his points during his Friday COVID briefing, adding that the contingency fund isn’t big enough to handle a long-term drain.

“If this comes through the Legislature and the Legislature wants to be called back into special session, I’ll do it tomorrow,” he said. “And if the Legislature is called back into special session and they bring it to me and want to do it, I’m all in.”

Around the same time he was saying that, Senate President Craig Blair and House Speaker Roger Hanshaw issued a joint statement essentially putting a kibosh on the idea.

“Every single member of the Legislature is sympathetic to the pain West Virginians are feeling at the gas pump these days,” they said. “When prices climb, family budgets suffer. It’s something every one of us understands.”

While they support tax cuts, they said, they can’t suddenly pivot and pause bonded revenue. “There are a multitude of legal reasons why we cannot simply suspend our gas tax. We cannot — and should not — implement policies like these that sound good, but in reality, would do far more damage to our state in the long term.”

There’s no guarantee, they said, that retailers would respond by lowering their prices accordingly. And lower prices would increase demand, leading to price hikes. Also, the loss of the $35 million in gas tax might lead the federal government to claw back federal highway funds.

Blair and Hanshaw referred to Amendment 1 that will be on the November ballot, to allow the Legislature to exempt business inventory, equipment and machinery from personal property tax, as a better solution, by putting “$600 million directly back into the pockets of the people who live and work in this state. That’s real relief for West Virginia residents, not just a break for folks who drive through and stop to buy gas. … We cannot sacrifice our long-term planning for a short-term fantasy.”

Shortly after Blair and Hanshaw responded, the state Democratic Party released a statement, calling Justice’s response “completely over the top.”

They said the move is not unprecedented in the state. “Gov. Joe Manchin froze the gas tax during Hurricane Katrina, and Gov. Bob Wise paused the state tax on building supplies during significant flooding,” said Delegate Mike Pushkin, D-Kanawha, party vice chair.

They reiterated their suggestion to use surplus funds to make up the loss, with the current surplus approaching $600 million, and $1 billion in the Rainy Day Funds.

TWEET David Beard @dbeardtdp