Thursday, August 21, 2025
Thursday, August 21, 2025
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Interim Government Organization Committee Adopts Draft Legislation

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During Monday’s Joint Government Organization Committee meeting, there was some concern regarding the draft legislation that would initiate moving the contractors licensing board into Chapter 30.

This legislation would move contractors into their own separate board, separating contractors from the Division of Labor for inspection purposes.

The purpose of this legislation is to prevent multiple inspectors on each job site. Additionally, the bill would cut the cost of licensing for contractors. There was no figure to show the difference in licensing price with the proposed legislation.

Delegate Mike Caputo, D-Marion, questioned the purpose of the bill. He was concerned that by taking away inspectors from the Division of Labor and creating a new entity, qualified people would lose their jobs. As of now, there are only 17 inspectors working for the DOL.

Another cause of concern was the fact that the DOL Commissioner Mitchell E. Woodrum was not included in the drafting of the bill. Caputo believes that his expertise is vital in the success of this bill.

Several delegates voted down the bill, but it wasn’t enough for it to fail. Despite the concerns expressed, this legislation was adopted to be introduced for the 2020 session with no new amendments.

The Interim Government Organization Committee approved six other draft bills to be introduced in the 2020 legislative session.

 

Revenue Secretary Presents December Collections

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Total collections for December came in $6.9 million above estimate with personal income tax and sales tax up from last year.

However, collections for the 2020 fiscal year are still down about $33 million below estimates with a big shortfall in severance tax collections.

Revenue Secretary Dave Hardy presented December numbers to the Joint Standing Committee on Finance in its Monday morning meeting.

Cumulative personal income tax collections were about $33.6 million below estimate from last year and cumulative consumer sales tax collections were about $2.8 million below estimate from last year. However, cumulative collections for personal income tax were 1% ahead of last year and cumulative consumer sales tax was 1.6% above last year

“Consumer sales and personal income tax are in good shape,” Hardy said.

Last month, Hardy told the committee that numbers were improving, following a rough November. At that time, he told the committee there were no concrete plans for mid-year budget cuts. Personal income tax and sales tax were negatively affected in November due to timing but saw some growth starting in December.

December’s total collections came in at $428.2 million, which was 1.2% above last year, and $6.9 million above estimate.

Collections from July to December were $2.2 billion but about $33 million below estimates. Hardy said most of the shortfall was due to severance tax, which Hardy said was down 34.9% because of declines in natural gas prices and coal exports, along with pipeline construction shut down from federal court orders.

“Our report card is good but if we had severance tax where it could be, it would be an excellent report card,” Hardy said.

Corporate net income tax collections were about $2.6 million below estimates for December but relatively flat compared to last year.

Deputy Revenue Secretary Mark Muchow said tobacco tax collections benefited slightly from the carryover effect from November to December and were 1.9% ahead of last year. However, cumulative collections were 4% below last year. Muchow said the decline is estimated to continue because of people switching to other products such as e-cigarettes and also because of signed federal legislation, which increased the purchasing age from 18 to 21 years old.

The committee also heard a draft resolution regarding the business inventory tax. The proposed legislation would be a constitutional amendment, meaning voters would have to approve it. The resolution seeks to eliminate the tax on manufacturing inventory equipment. It would prohibit companies from reclassifying property not previously classified as manufacturing inventory just to receive the tax benefit.

PEIA Director Updates Legislators on Finances

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The director of the West Virginia Public Employees Insurance Agency told legislators there are no plans for premium increases or benefit cuts in the next plan year.

However, some legislators expressed concerns in Monday afternoon’s meeting of the Select Committee on PEIA Seniors and Long Term Care about the long term use of funds from PEIA’s Rainy Day Fund.

Director Ted Cheatham gave committee members an overview of PEIA’s finances and progress with implementing prior-authorization processes under House Bill 2531. He told committee members there are no planned premium increases for state employees or retirees for the next plan year and that money transferred from PEIA’s Rainy Day Fund will not go toward the 80/20 calculation.

Delegate John Kelly, R-Wood, said he was concerned about depleting PEIA’s Rainy Day Fund.

“If we don’t increase rates, we will continue to deplete what we have in the Rainy Day Fund and be back to where we started from. I don’t want to go in that direction,” Kelly said.

“I think we’re headed in the wrong direction,” Kelly later added.

Delegate Randy Swartzmiller, D-Hancock, also expressed concerns about depleting the balance, asking what would happen if money in the Rainy Day Fund ran out.

Cheatham said in that situation, he would have to come back before the Legislature to request more funding. He said PEIA needs about 50 million in new dollars every year to keep the program sustainable.

Cheatham went over PEIA enrollment and proposed changes. He explained PEIA’s enrollment has been relatively flat for the last five to six years. However, the number of retirees has been increasing, with an average of 3,000 new retirees every year. He said that increase has started to slow down with 2,500 new retirees this year.

He also mentioned benefit recommendations including adding two free chiropractic visits for back pain.

“Studies show the use of a chiropractor can avoid surgeries and more expensive care later,” Cheatham said.

Another proposed change is to align PEIA’s high-deductible Plan C with Plans A and B in having no out-of-network coverage out of state. Cheatham said PEIA also will explore providing coverage through alternative foundation funding to offset costs for some specialty medications.

PEIA also has tentative plans to launch two wellness pilots in January—one, called CAPPA, which is a diabetic prevention program; and the other, Naturally Slim, which is a weight control program.

Cheatham said the PEIA Trust Fund has more than $1 billion in funding for OPEB liability. He said OPEB liability is 31% funded and he hopes to see it fully funded between 2036 and 2038.

Cheatham also covered progress implementing House Bill 2351, which established procedures, forms, portals, and deadlines for electronic prior authorization submissions Cheatham said UMR is PEIA’s third party administrator and has an operational online portal. He said CVS also has an online portal for specialty drugs, which he said he hopes to see operational by July 1, 2020.

Lawmakers Recommend Voting Bill For People With Disabilities

On Monday during a meeting of the joint Judiciary committee, lawmakers voted to advance a bill to the full Legislature that would allow those with physical disabilities to vote via electronic absentee ballot.

The bill would change the current West Virginia code definition of “disability” to align with the Americans with Disabilities Act, which defines physical disability as “a physical impairment that substantially limits one or more major life activities and renders a person unable to vote in person, at the polls, without assistance.”

Current code requires those in West Virginia who want to vote absentee due to disability to be blind, have trouble using their hands, or be “totally and permanently disabled.”

Donald Kersey, counsel for the West Virginia Secretary of State, told lawmakers it’s the right thing to do, it’s the legally required thing to do, and it will eventually be required by order of a court.

Kersey explained to lawmakers that Maryland and Ohio both faced lawsuits from disability rights groups over similar voting laws. In both instances, disability rights advocates prevailed in court.

Though not specifically addressed in the bill, the lack of internet access for many West Virginians was discussed. Staff counsel mentioned that those without access may eventually be able to vote via public internet.

 

Revenue Secretary: No Plans for Mid-Year Budget Cuts

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West Virginia Revenue Secretary Dave Hardy told legislators there are no plans to make mid-year budget cuts at this time.

The Joint Standing Committee on Finance heard 2020 fiscal year budget issues and the possibility of eliminating the business inventory tax in Monday morning’s committee meeting.

Hardy told the committee that although December is only halfway over, numbers for the month are looking better after a rough November.  Currently for December, the state is over estimates, Hardy said. However, the state is still about $29 million under estimate for the fiscal year.

“What happened in November is the last business day was Wednesday, November 27,” Hardy said. “We came in below estimates for November. The first week of December, revenue did come in.”

Previously, Hardy said the governor asked the Department of Revenue to consider making $100 million in cuts from General Revenue. However, there were no concrete plans in what, if any, cuts needed to be made. In Monday’s meeting, Hardy said there are no plans to do mid-year budget cuts, with the official mid-year point about two weeks away.

“Overall, the fiscal year is on target,” Hardy said. “This is a $4.7 plus billion budget and 1% of that budget is $47 million. We are two-thirds of a percentage point away from being exactly on target.”

Deputy Revenue Secretary Mark Muchow said November’s numbers were about what he expected but looked worse because of the way the calendar ended, as opposed to previous years.

“We should make that up a bit in December,” Muchow said.

Sales tax, corporate income tax, and insurance taxes were not as negatively affected by the timing.  However, personal income tax, which still saw some positive growth, along with withholdings, and business and occupation taxes, were affected.

Tobacco taxes were also below estimates in part because of the timing. However, Muchow said one of the big reasons for the decline is because of a trend in substituting traditional tobacco products with other products.

Overall, November’s collections were at $322.9 million and were $7.2 million below estimate, and $40.3 million below estimate year-to-date. For the General Revenue budget, Muchow said he is hopeful to have a 1.1% decline rate this year.

“If we get to that level, we will be on estimate and be on budget,” Muchow said.

The committee also heard from the West Virginia Manufacturers Association and the West Virginia Development Office on the possibility of eliminating the tax on manufacturing inventory, machinery, and equipment.

Rebecca McPhail, president of the West Virginia Manufacturers Association advocated for a bill to eliminate the tax over an undetermined amount of time, and to provide protections for schools and municipalities by providing replacement revenues each year.

She and Michael Graney, executive director of the West Virginia Development Office, said they believed eliminating the tax would make West Virginia more competitive, especially with surrounding states. Both cited that West Virginia is one of seven states that has a business inventory tax and is one of two states without an opportunity to waive the tax.

Joint Energy Committee Hears Proposed Bills on Expedited Permitting, Abandoned Wells

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A bill providing an expedited permitting process for oil and gas wells and another creating an Oil and Gas Abandoned Well Plugging Fund may be taken up again in the upcoming legislative session.

The two proposed bills were presented to the Joint Standing Committee on Energy in its Monday morning meeting.

The first bill, which would allow expedited permits by paying an additional permit fee, is similar to Senate Bill 665 — which died in the House the last day of the 2019 Regular Session. Under the bill, operators would pay a $20,000 expedited permit fee for the first horizontal well drilled and another $10,000 for additional horizontal wells drilled on a single well pad at the same location.

The West Virginia Department of Environmental Protection secretary would issue permits in 45 days – or no fewer than 30 days if the secretary decided to reduce the permit time – providing that the permit is not denied or more information is not needed.

Additionally, permits could be modified for an additional $5,000 fee for any horizontal well drilled and the permit would be issued within 20 days of submission.

Deep wells are excluded from this bill.

Half of the fees would go to the Oil and Gas Operating Permit and Processing Fund, which would be earmarked for DEP staffing costs to review permits. The other half would go to the Oil and Gas Reclamation Fund, which would be earmarked to plugging oil and gas wells.

Jason Wandling, DEP general counsel, said the agency needs to hire one or two more people to handle the proposed expedited process.  Wandling said the agency may need to explore additional funding options for enforcement. He said the funding for enforcement currently is sufficient but it is fueled by permit fees.

“There has been a reduction in permit applications over the last couple of years,” Wandling told the committee. “It is down significantly from last year and the year before.”

Another bill presented to the committee would create a fund for addressing orphaned wells. This bill is similar to House Bill 2673, which was vetoed by the governor following the last legislative session.

The proposed bill makes a few changes from the previous session’s bill. This bill would decrease the cap of the fund and extends time periods for the DEP regarding the fund balance.

The bill would reduce the severance tax of low-producing wells and would plan to use money to plug orphaned oil and gas wells. The bill would reduce the severance tax from 2.5% from 5% for natural gas operators producing between 5,000 and 60,000 cubic feet of natural gas per day or between a half and 10 barrels of oil per day.

The bill creates a new fund called the Oil and Gas Abandoned Well Plugging Fund, which would be administered by the DEP to plug orphaned wells. When the fund reaches $6 million, severance tax would drop to 0 until June 1 the following year and the DEP could spend below the $6 million cap. This bill lengthens the amount of time for the DEP to spend the money below the $6 million cap. The previous bill allotted for a year or less.

The bill also would require the DEP to report to the governor and Legislature on the balances in the fund, and the number of wells plugged, along with a five-year plan for plugging wells.

House Passes Tourism Bill, Adjourns Special Session

The West Virginia House of Delegates adjourned the Second Extraordinary Session of 2019 after it passed a bill that would extend tourism tax credits.

In Monday’s floor session, the House took up Senate Bill 2001, which was left on second reading from last month after a motion to suspend the constitutional rules requiring bills be read on three separate days failed. This bill would extend tourism development tax credits from December 31 of this year to December 31, 2025.

Delegate Mick Bates, D-Raleigh, initially offered four amendments. The first amendment would have required those receiving tax credits to comply with existing reporting requirements, required other companies owned by those receiving tax credits to be within compliance, and provided that a company owned by statewide elected or appointed officials would not be eligible for this tax credit.

The amendment was ruled not germane and Bates withdrew his other amendments.

Legislative audit: CPS Faces High Turnover, Vacancy Rates

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In 2018, Child Protective Services met its required initial contact timeframe for abuse and neglect cases half of the time, a legislative audit report found.

In Tuesday’s Post Audits Subcommittee meeting, Melissa Bishop, assistant director of the Post Audit Division, explained some of the reasons for not meeting the statutory timeframe for face-to-face contact with an alleged child victim, were out of CPS staff’s control.

Some of these reasons included not being able to track down a family because of information was missing or incorrect, the family was not home when CPS workers visited, or the family refused to meet with CPS workers.

However, Bishop said the primary cause was high turnover and vacancy rates for those who respond to abuse and neglect cases.

CPS offices are divided into 28 districts in four regions. Turnover rates have slightly improved from 2017 to 2019. However, in Region 3 – which encompasses counties in the Eastern Panhandle and extends to Lewis and Braxton counties – turnover rates increased from 30% to 37%. Bishop said this turnover rate could be attributed to losing staff to higher paid positions across state lines.

When an employee leaves CPS, they participate in an exit survey. In those exit surveys, employees cited wages, caseloads and stress, as the top reasons they left. Bishop said the Bureau for Children and Families has added 48 new positions to reduce caseload, added two and five-year 5% pay increases, and added a $1,500 increase for those with the highest caseloads.

However, these efforts have not corrected the issue, Bishop said.

Compared to the five surrounding states, West Virginia differs on educational licensure requirements and has lower salaries. Bishop noted West Virginia’s starting salary is the second lowest in the region. Pennsylvania and Virginia have comparable salaries; however, licensure is not required.

Bishop said the amount of overtime worked by CPS workers continues to increase. It has increased 40% since 2015. She said there have been efforts to reduce overtime including the creation of a Crisis Team to deal with backlogs. However, due to the nature of CPS work, all overtime cannot be eliminated.

The report additionally found that CPS does not record intake calls and call case information is dependent on notes taken from the calls.

The audit also found CPS does not perform criminal background checks for workers after they have been hired. Bishop said the practice of completing criminal background checks happens for foster parents but not CPS workers.

The audit made several recommendations. These included developing processes to ensure required response times are met, for CPS to report back to the Post Audits Committee in six months, for the Bureau for Children and Families to update its retention plan, for the bureau to increase recruitment and retention strategies, to record intake calls and store in encrypted files for quality or training purposes, and to provide regular background checks for those who currently work for CPS.

DHHR associate general counsel Cammie Chapman, said the Bureau for Children and Families is working with federal partners on a program improvement plan, which the bureau hopes to have in place by the end of this year.

Chapman said the Committee for the Bureau of Children and Families recently updated its goals and is compiling data to determine potential recruiting and retention efforts, intending to collect data on successes and strategies.

She said the $31,000 starting salary is a significant increase from a few years ago, accounting 5% raises passed by the Legislature. Chapman said the goal is to create a career ladder to help with the recruiting and retention issues.

She said there are significant costs for ongoing storage for intake calls. For background checks, she said the bureau needs a more formalized license in personnel files and to make sure there is sufficient record keeping.

Brianna Walker, an auditor with the Post Audit Division, also addressed the Post Audits Subcommittee Tuesday afternoon. A legislative audit report found that the current process for state contractors does not address local taxes.

After a contract is signed, it is up to the contractor and sub-contractor to notify a municipality of work performed in that area. Walker said there is no oversight to make sure that is done.

The audit recommended all state spending units, including those exempt from purchasing, give formal written notice to municipalities of work done in an area, and to consider establishing surety bond requirements for contracts exceeding $1 million.

Senate Adjourns Special Session Sine Die

The Senate met briefly Tuesday afternoon before adjourning the second extraordinary session of 2019 Sine Die.

The Senate convened shortly after Noon, quickly adopting procedural resolutions to notify the House of Delegates and the Governor that the body has completed its work in the special session.

Senate Bill 2001, which would extend tourism development tax credits from December 31, 2019 to December 31, 2025, remains on second reading in the House of Delegates. The House has the option to pass this bill in its current form in December, but cannot amend it, given the Senate has adjourned the session sine die.

Revenue Secretary Says No Concrete Plans on Budget Cuts for FY 20

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Revenue Secretary Dave Hardy told legislators Monday that there are no concrete plans on what type of budget cut, if any, should be made for the 2020 fiscal year.

Hardy addressed members of the Joint Standing Committee on Finance Monday. Hardy addressed 2019 fiscal year numbers along with the first five months of the 2020 fiscal year.

Hardy said the state finished the 2019 fiscal year with “record-breaking revenues” and revenue growth of 11-12%. However, he said he was disappointed in July because revenue was $33 million below estimate. Revenue collections fell short of estimates by about $16 million in August. Hardy said the state reported about $21 million above revenue estimates for September and was $3.2 million below for October.

“Turning a state budget around is like turning an aircraft carrier,” Hardy said. “You have to go slow.”

Hardy said the governor asked the Department of Revenue to consider making $100 million in cuts from General Revenue. This would be $100 million out of a total General Revenue of $4.7 billion.

However, Hardy said there is no definite plan of what type of budget cut, if any, needs to be made at this time.

“Right now, nothing specific is being proposed,” Hardy said. “But we will continue to monitor finances very carefully.”

November numbers could appear shorter than normal because collections fall on the 27th, right before the holidays, Deputy Revenue Secretary Mark Muchow said.

Muchow said coal and natural gas are both down with revenue squeezed by a significant drop in international exports and by low domestic energy prices. However, he said local governments are still benefitting from the upturn several years ago for severance tax collections. He attributed the local effect to timing.