Everybody wants a tax cut, but which tax and in what order?
Gov. Jim Justice has proposed a 10 percent income tax cut to be considered in a special session straight ahead.
Senate President Craig Blair says his Republican caucus is likely to favor an income tax cut — but probably not ahead of the property tax cut that’s been in discussions for months.
The timeline to figure out that puzzle is just a couple of weeks, prior to the special session that Justice suggested could begin the fourth week of this month.
Governor Justice, during an appearance on MetroNews’ “Talkline,” said he wants to go full steam ahead on an income tax cut amounting to a little more than $250 million.
“We’ve got to do something now,” the governor said, alluding to the pressures of inflation that people have been facing.
Justice announced his proposal for an income tax cut during a briefing about the state budget on Wednesday. The briefing focused on West Virginia ending the fiscal year $1.3 billion ahead of projections for the general revenue budget.
So the governor said the state can afford an income tax break, with the amount varying across tax brackets. That breakdown isn’t set yet. “Shortly we should be able to come up with some hard numbers to share with the public and with the Legislature,” Revenue Secretary Dave Hardy said.
But the governor and the Senate majority might not see eye-to-eye on what tax cut to move on.
West Virginians are set to vote on a proposed amendment to the state Constitution in November to allow the Legislature to make changes to property taxes.
Assuming that passes, the Senate majority has been deep into discussions about cutting property taxes on business equipment and inventory as well as on people’s vehicles. Initial estimates indicate that could have a financial effect of about $500 million.
But the governor said today that issue is yet to come, saying the matter “is more of a concept,” and he wants to focus on income taxes right now.
“My plan does one thing, and that is, we’ve got to get money in the hands of the people today,” Justice said. Describing the vote on the amendment as months still ahead, Justice said, “it’s out there. We’ve got to do something now. So this gets us on a great pathway.”
Senate President Blair, R-Berkeley, said he supports reducing the personal income tax.
But there’s a catch.
“What I don’t support is doing it before we do the personal property tax,” he said.
“The personal property tax is on the ballot this November. It’s significant. It applies to all West Virginians. And a 10 or 20 percent reduction in the personal income tax doesn’t produce any economic growth or any economic opportunities to grow this state, to grow the fiscal pie.”
Blair, also speaking on MetroNews’ “Talkline,” said he needs to speak more with the Senate majority caucus about the level of support for the governor’s proposal.
He floated an idea for the governor’s policy proposal to envelop the property tax initiative.
“It depends on what the bill is,” Blair said. “Ideally, he could put a bill that does the personal property tax. We’ve got the resources to do it. We’ve got the information from the counties on what it might cost.”
What are @WVSenatePres thought's on Governor Justice's tax plan? Does he support or oppose this plan? Senate President Blair joins @HoppyKercheval. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/3sp953aXO4
— MetroNews (@WVMetroNews) July 7, 2022
Senate Minority Leader Stephen Baldwin, D-Greenbrier, expressed interest in learning more about the governor’s income tax proposal, but wondered whether it could be balanced against the property tax cut proposal.
“Can we afford it if the machinery, inventory, equipment and personal property tax amendments are passed by the voters in November? We are mindful that our historic surplus this year is one-time money,” Baldwin stated.
“Without a six-year outlook, we have great concern about ensuring that our police, schools, and first responders will be fully funded on the county level.”