Senate passes its version of the budget bill — with a lot of talk about Hope
By Autumn Shelton, RealWV
CHARLESTON, W.Va. – The West Virginia Senate has passed its version of the budget bill, and it includes a 10% personal income tax reduction, partially paid for through an additional tax on vape products, as well as a 3% average pay raise for state employees, a fully-funded higher education funding formula and a fully-funded Medicaid program.
Senate Bill 250, the budget bill, also provides additional funding for PEIA, restores funding to the Division of Arts, Culture and History, and pre-funds the Hope Scholarship Program, according to Senate Finance Chair Jason Barrett, R-Berkeley, who explained the bill on Friday.
“Two of the biggest drivers in the budget are the Hope Scholarship and Medicaid,” Barrett said of the $5.381 billion general revenue budget, adding that he believes the changes made to fund the Hope Scholarship will ensure its future solvency.
In Governor Patrick Morrisey’s introduced budget, a $5.493 billion budget, $21.54 billion was appropriated in spending authority, a 1.3% increase in additional spending compared to fiscal year 2026. This includes $338 million to fully-fund the Hope Scholarship – $230 million to be front-loaded from general revenue and $108 million to be used for the beginning of fiscal year 2028 from back-of-the-budget general revenue surplus.
However, in order to make room for the proposed 10% personal income tax general revenue loss, which Morrisey has advocated for, the Senate had to make financial adjustments – one of them being removing the governor’s $230 million in Hope Scholarship funding from general revenue, while appropriating $100 million to the Hope Scholarship Program through supplementals and $208 million from general revenue surplus – meaning the state would need to meet all of their financial obligations before the majority of funding for the Hope Scholarship would be allocated.
In lieu of this change, Senator Patricia Rucker, R-Jefferson, chair of the Select Committee on School Choice, said that she has concerns that funding for the Hope Scholarship is not in the front of the budget. But, she said she appreciates the work that has been done, and believes the bill is an “incredible attempt to provide all the things that we all care about.”
“This is a first draft. This is going to come back,” Rucker said. “And, at the end of the day, it is my hope to support a budget that we pass that is going to completely fund the Hope Scholarship and all of the necessary programs for the citizens of this state.”
As for the 10% personal income tax reduction in the Senate’s budget, Barrett explained that the governor’s bill included a built-in 5% cut, which would amount to a revenue loss of about $125 million. This meant the Senate had to find a way to offset the loss of an additional $125 million, some of which was made up for through a $22 million vape tax.
According to discussions that took place during the Senate Finance Committee meeting on Feb. 16, another large reduction that needed to be made was a $35 million cut to the Department of Health Facilities.
The Senate also included $160 million in budget improvements, including $2.8 million to cover a 3% pay raise for court employees, which was not included in the governor’s budget, funding for an Office of Entrepreneurship through the Secretary of State’s office, $546,000 to cover a proposed pay raise for mine inspectors, a restoration of funding for Save the Children, Jobs and Hope and CASA, an $8 million restoration in higher education funding, and moving an additional $121 million in Medicaid funding from surplus to the front of the budget.
Sen. Eric Tarr, R-Putnam, questioned the $386 million increase in base spending compared to last year, as well as the $103 million general revenue shortfall resulting from the 10% personal income tax cut. He said he would be a no vote on this budget bill.
“We are increasing spending and then saying we are going to reduce our income by $250 million,” Tarr said. “And, there’s a way we can get there, and we’ve proven how to do that. We’ve done it year after year after year for a while. And, the way that you do that, is you hold a flat budget where you reduce your spending and then, by that, you’re going to increase your revenue reduction, which would be a tax cut. Anyway but that, when you start going out now, especially with triggers in place that go ahead of 3%, you place us in a position in a future legislation to come back in and have to increase taxes, or do cuts that you really, really don’t want to have to cast a vote on.”
Tarr said he hopes that when the budget comes back to the Senate, and reflects responsible spending, that he can be a yes vote.
Sen. Joey Garcia, D-Marion, asked Barrett if the passing of this budget means that all other bills dependent on funding, such as changes to the school aid formula and the governor’s proposed “Bring Them Home” fund, are dead.
Barrett responded that he doesn’t believe the remaining bills are dead.
“Senator, all those things, I think, are on the table from the perspective that we are going to send this budget over to the House, and they rolled their budget out of House Finance yesterday morning,” Barrett said. “As you know that the negotiation point will start. We’ve run the bill out, I believe, probably the fastest maybe in history, at least from my time here, and that’s really to start the conversation earlier. It’s to try to get to some form of a tax cut. If the House decides that it’s not the direction they want to go, there are certainly other options on the table where we could take up some of the bills you’ve mentioned. There’s a possibility to still do some form of a tax cut and some of the other items as well.”
Garcia stated that a $250 million tax cut is just not responsible at this time.
“I think this tax cut is gonna have the effect of tying our hands in the future on some of the most important things that could keep West Virginians in the state,” Garcia said, adding that child welfare is a concern that needs to be addressed as is the need for affordable childcare and the need to fund public schools.
Sen. Mike Woelfel, D-Cabell, also shared his concerns about the Senate’s proposed budget.
“I never thought I’d see the day where the West Virginia Senate is gonna boast that it’s spending, it’s allocating, $300 million to school vouchers,” Woelfel said. “That needs to be in the headline of every newspaper, the few that are left, in the state.”
Woelfel went on to say that county boards of education are “barely hanging on,” and 25% of public education students are identified as requiring special education.
“Those children are entitled by the Constitution of our state to a thorough and efficient education,” Woelfel said, adding that public education is a constitutional right. “I’m a no vote on this. I think our priorities are mixed up.”
Rucker responded that an efficient and thorough education is a constitutional right for all children in West Virginia.
“It is really, really, unfortunate that our public schools are struggling,” Rucker said. “With that, there are many public schools that are having financial difficulties. It is unfortunate that sometimes it’s because of mismanagement. It is unfortunate that sometimes it is because they are spending money on things that are not prioritizing the kids. It is really unfortunate that we have a lot of administrative costs in our public school system, which is supposed to be thorough and efficient.”
Rucker said that the Hope Scholarship is set up to “ensure that every child in West Virginia gets a good education,” and that she hopes the state’s public school children are having a good experience and “finding what they need to be successful.”
“Hope provides exactly what it’s called – hope – to these West Virginia kids, some with special needs, some with very unique needs that it’s not fair that we could ask our public schools to address,” Rucker said. “Our public schools are doing the very best that they can. And, do they need more help, more support? Absolutely. And, ever since we passed the Hope Scholarship, we have increased funding to our public schools.”
Sen. Ben Queen, R-Harrison, said he was proud of the choices made in this budget, including the 10% personal income tax reduction.
“At the same time, we’ve invested in the future,” Queens said. “We’ve strengthened Jobs and Hope because when someone gets a second chance and goes back to work, that doesn’t just change their life, it changes the life of their families. We increased funding for the school building authority, because I think our kids deserve safe, modern schools that reflect on how much we believe in them and defending our community schools. We fully funded higher education . . . we are finally going to use that funding formula that many of us discussed for the last five, six, seven years. We gave more money to foster care – $27 million to be exact.”
Additionally, Queen said cuts were made where they needed to be, but work still needs to be done to make government efficient.
“Tax relief, education, opportunity and jobs – I believe that’s what this budget represents,” Queen stated.
The budget bill was passed by a vote of 28 yes votes and 4 no votes, and is now headed over to the House for additional consideration.
On Thursday, the House Finance Committee advanced their version of the budget bill through House Bill 4027.
RealWV will continue to provide updates on the state’s budget process as they become available.
