At The Capitol: Taxes, health care and scheduling

CHARLESTON, W.Va. — It may come as a surprise to anyone who has been audited by the Tax Division, but a legislative audit released earlier this month found the state has failed to collect more than $298 million of delinquent taxes over the past 10 years.

Using the GenTax tax software system to find unpaid but collectable taxes, the
audit found 50,189 delinquent personal income tax accounts, totaling $104.7
million; 41,112 delinquent sales tax payments totaling $83.9 million; 20,963
unpaid payroll withholding tax claims totaling $40.16 million, and 79 unpaid
coal severance tax accounts totaling $6.9 million, among the delinquent accounts.
Considering that the Legislature had to take more than $83 million out of the
state’s Rainy Day emergency fund just to balance the 2014-15 state budget, the
delinquent taxes raised concerns among legislators.

“Is it fair to say if we collected even a third of that, it would be $100
million?” House Majority Leader Harry Keith White, D-Mingo, asked.

However, state Tax Commissioner Mark Matkovich stressed that the delinquent
taxes amount to less than one percent of the more than $40 billion of taxes
collected over the past 10 years, and said it is misleading to suggest all $298
million is collectible.

He said that includes accounts under litigation, accounts of deceased taxpayers,
as well as defunct businesses and taxpayers who have no assets to pursue.
Matkovich also suggested there are times when leniency is the better policy. “The Tax Department strives to keep businesses open, preserving jobs, supporting

the state’s economy and maintaining the tax payment stream,” he said.

Unlike May, when a concurrent special session called by Gov. Earl Ray Tomblin
disrupted the interim meetings schedule, legislators had a full three days of
June interim meetings, held June 16 to 18 at the Capitol.

Other highlights of the June meetings:

—  Another legislative audit concluded the state Bureau of Medical Services is
not following a 2011 federal directive to suspend Medicaid payments to health
care providers accused of fraud, putting it at risk of losing between $17.9
million to $211 million in federal matching funds.

Under the Affordable Care Act, states are to suspend Medicaid payments to
providers in cases where there is a credible allegation of fraud that is
referred to the Medicaid Fraud Control Unit for investigation. The audit found
the state suspended payments to providers only in a handful of those cases, and
could be liable for the repaying the federal matching funds.

In a related matter, operators of rural health clinics around the state said a
recent settlement by the Department of Health and Human Resources will lower
Medicaid reimbursements to their clinics, while forcing them to reimburse past
overpayments.

Without assistance from the state, that could force some smaller rural health
clinics to close, Dr. Mark Tomsho of Summersville told legislators.
“It’s absolutely crippling to our clinic,” he said.

—  Administration Secretary Ross Taylor told legislators the new Capitol complex
master plan has a total price tag of $805 million, but said funding is in place
for only part of the first of seven planned phases of development.

Completed at a cost of $1 million, the master plan is designed to address
deficiencies in the Capitol complex, including insufficient security,
overcrowded office buildings, outdated utilities, and inadequate parking.

Ultimately, it calls for construction of six five-story office buildings, each
with underground parking, and relocating all other Capitol complex parking to
three new parking buildings, all to be located off-campus. The plan calls for
construction to take place in phases over a 15-year period.

“As of right now, we do not have the funding available to do anything more than
the first phase,” Taylor told the Council of Finance and Administration.

That phase, whose first projects include a fence around the governor’s mansion
and the conversion of the Culture Center parking lot into a bus turnaround,
should begin later this year, Taylor said.

— Legislators will not hold monthly interim meetings in July, and made it
official last week that the August meetings will be a road trip to Bridgeport,
home of House Speaker Tim Miley, D-Harrison.

— While the Bridgeport Conference Center will serve as headquarters for the
legislative meetings, Aug. 25-27, meetings and visitations are also planned for
other locations in Harrison, Marion and Monongalia counties.