CHARLESTON, W.Va. Gov. Joe Manchin says West Virginians can avoid a gas tax hike estimated at 6 cents per gallon come Jan. 1, thanks to flush state revenues this year.
Manchin says he's asking lawmakers in special session to suspend that scheduled increase for one year. The state would offset the resulting loss of revenue to the State Road Fund with $40 million in general revenue and excess lottery surplus.
"We think this is the best way we can bring relief to all citizens,'' Manchin told reporters Monday.
The governor is also proposing $5 million to help counties with their school bus fuel bills, and $1 million for Meals on Wheels programs statewide.
Expected to start Tuesday and end Wednesday, the special session would include a half-dozen or so bills vetoed earlier because of technical flaws. Legislators will also consider a $25 million measure meant to fund transfers between state-run teacher retirement programs.
West Virginia has the 13th-highest state gas taxes in the country. Manchin's relief measure targets a variable component of the state's motor fuels tax. Calculated from average wholesale prices posted from July through October, it takes effect each Jan. 1 for the following year.
Manchin cited soaring prices for his 6-cent estimate, which would reflect a 757 percent increase over the 0.7 cent hike seen this year. That variable component now totals 11.7 cents, and accounts for more than one-third of the total state tax. That per-gallon tax also features a flat 20.5 cent rate. Motorists also pay federal per-gallon taxes of 18.4 cents on gas and 24.4 cents on diesel.
The governor's relief proposal would echo a step taken by Georgia earlier this month and being weighed in such other states as Connecticut. Lawmakers in New York and Louisiana, meanwhile, are debating whether to suspend temporarily all or part of current gas taxes.
Manchin has been discussing this and other agenda items with fellow Democrats who lead the Legislature. Welcoming the governor's gas proposal, House Minority Leader Tim Armstead said the scheduled increase "would add insult to injury for West Virginians already burdened by high gas prices.''
But the Kanawha County Republican also said lawmakers should later revisit the entire method for feeding the State Road Fund. Armstead cited the effect of high prices on fuel sales, which has dampened the resulting revenue.
"When you're faced with $4-a-gallon gas, this process doesn't work,'' Armstead said.
West Virginia's fuel taxes provide one-third of revenues for its State Road Fund, which has struggled for years to keep pace with road-building and repair needs. Projected to bring in $405.8 million by the time the fiscal year ends June 30, those taxes are tracking 2.2 percent below estimate.
The teacher pension item follows the choice by more than 15,000 members of the Teachers' Defined Contribution plan to move to the Teachers' Retirement System. TDC offers individual accounts in which members invest funds to generate benefits, like a 401(k) program. Complaints over poor returns helped prompt the exodus to the other plan, which offers a benefit based on final salaries and years of service.
The $25 million is meant to subsidize payments the transferees face if they want to receive full benefits under their new plan. TDC has been charging them less of their salaries than the Teachers' Retirement System.
State officials are still calculating the exact amount needed for the subsidy, and Manchin said it may fall below the $25 million he's requesting.
The governor also said this proposal will allow transfers by members who want to move over, but whose opt-in forms missed the May deadline through no fault of their own. Those include educators at a Marion County high school whose principal failed to hand in their forms on time.
