Just ahead of a special session to consider cutting personal income taxes, Gov. Jim Justice says he met with senators to try to persuade them.
The special session is supposed to start at noon Monday, but it’s entirely unclear whether the Republican governor and the Senate’s Republican majority agree on a tax plan.
Senate leaders have said they prefer moving first on personal property tax cuts, and they had invited the governor to attend an evening caucus meeting to discuss the proposals.
Justice, in a press release, indicated he met earlier Sunday afternoon with Senate President Craig Blair for 90 minutes before gathering with more Republican senators.
The governor stated that he is not opposed to the Senate majority’s tax plan, “but he strongly believes, without a doubt, that his proposal to reduce the personal income tax will bring immediate relief and substantial growth to West Virginia.
“Additionally, Gov. Justice expressed deep concerns as to what would happen to our counties and cities if we had a downturn in our economy.”
Blair and Senate Finance Chairman Eric Tarr, both Republicans, earlier emphasized their preference is to move ahead with property tax cuts first. But since the governor announced the special session for the income tax proposal, they have made no public comments
In a letter to the governor, the senators invited Justice to discuss the tax proposals during the private caucus meeting at 6 p.m. Sunday.
Their letter suggested there hasn’t been a previous opportunity to talk.
“We have repeatedly attempted to engage in meaningful conversation with you, as we believe the leaders of this state should speak directly and not through intermediaries,” Blair and Tarr wrote in the signed letter to Justice.
“The Senate majority caucus is optimistic that it would be productive to discuss and compare your income tax bill, which proposes to reduce the average West Virginian’s income tax deduction by approximately $9 per paycheck, and the Senate plan for eliminating the personal property tax in West Virginia.”
Justice’s Sunday afternoon statement said lines of communication were open already.
“Gov. Justice has repeatedly and consistently mentioned publicly that he welcomes meaningful discussions with the Legislature regarding repealing the personal income tax and other ways to move West Virginia forward,” his statement said. “Any insinuation otherwise is incorrect.”
The governor has talked about an income tax cut of about 10 percent for a few weeks. In the middle of last week, he came out with his proposal — with the brackets for lower wage earners getting slightly higher breaks by percentage.
The Governor’s Office estimates the personal income tax cut would total a little more than $250 million. The governor points toward a budget that concluded the fiscal year $1.3 billion ahead of estimate.
The Senate leaders say they support that idea, but they want to move on personal property taxes first. West Virginians vote in the General Election on a constitutional amendment that would give legislators the ability to change property taxes.
The proposal to cut property taxes isn’t set in stone yet, but widespread estimates suggest it could amount to more than $500 million — with the state needing to reimburse counties that are dependent on property taxes to provide local services.
Revenue Secretary Dave Hardy on Friday said that would amount to a financial disaster.
“That type of number would basically shipwreck the state’s budget going forward,” Hardy said on MetroNews’ “Talkline.”
The West Virginia Manufacturers Association on Sunday asked lawmakers to focus on property taxes first.
“Our members have been hoping for a modernization of West Virginia’s property tax structure for many years. We finally are in the home stretch of getting approval from voters to give the Legislature the authority to act on how we tax manufacturers and other businesses as well as the vehicles owned by West Virginians,” Manufacturers Association President Rebecca McPhail said.
“I applaud the governor’s leadership and the state’s record revenues coming off a global pandemic, but the WVMA believes the prudent course is to achieve passage of Amendment 2 and update that section of the tax code before addressing personal income tax.”
The West Virginia Center on Budget & Policy think tank has assessed each of the tax cuts as being more beneficial to companies and wealthier earners.
But the most recent comment from the organization focused on the personal income tax proposal that will be in front of legislators on Monday.
“In addition to putting state services at risk by using a one-time surplus to justify a permanent tax cut, the governor’s plan provides little for working families,” said Kelly Allen, the executive director.
“Under his plan nearly two-thirds of the tax cuts would go to the wealthiest 20 percent of households, with the average household seeing a cut of just $2.30 a week.”