6:00: Morning News

Governor says state can’t afford income tax cut plus property tax cut

Gov. Jim Justice, former supporter of property tax cuts for businesses, has concluded the state would get more economic juice from an income tax cut — and that it can’t afford to do both.

The governor says the state’s current financial health now means it can afford a significant personal income tax cut.

“Let’s be completely fair. Nobody on the planet would have ever really dreamed — nobody on the planet would have dreamed that we would ever be in position to get rid of the personal income tax. The personal income tax is a real driver of real growth to people all across this nation,” he said today on MetroNews’ “Talkline.”

“Now today we have a chance — we have a chance of doing that. Listen, I would be in favor of getting rid of every tax in all honesty, but you just can afford to do but so much. So today we’re at a crossroads.”

Justice is crossing West Virginia’s roads to deliver that message.

The governor was in Wheeling on Friday to promote his income tax cut proposal while also campaigning against the passage of Amendment 2, which would give lawmakers the ability to alter property taxes. Today, the governor’s schedule was taking him to Beckley for the same message.

In prior years, the governor has expressed support for cutting the property taxes that businesses pay on their equipment, machinery and inventory.

In his 2018 State of the State address, Justice introduced a proposal he called “Just Cut Taxes and Win.” “What I want to start with is the elimination of the tax on manufacturing machinery and equipment and manufacturing inventory,” he told the crowd that night.

For the 2019 address, he followed up by declaring, “Today, I’m  requesting the elimination of the business inventory machinery tax.”

And in 2020, he reiterated the message: “The business inventory and machinery tax is holding us back in some areas. We need to try — we need to try to find a solution to where we can either get on a glide path or quickly get on a better glide path to eliminate that tax if we can.”

In those 2020 remarks the governor did express some caution about the kinds of local services that property taxes support in West Virginia. But his conclusion remained in favor of cutting property taxes.

“We have to be careful.  There’s counties to consider, the school boards, there’s people that we absolutely want to protect.  We’ve got to be careful.  We’ve got to be careful with where we are with our general overall finances. We have to be careful and we got to be smart. But I don’t want there to be anyone to doubt that I would like it gone. I would like it gone. At least gone in time.”

The governor’s current message includes more emphasis of the role property taxes play in supporting schools and other aspects of local government. Today, he said he’d cut every tax he could — but he’s learned enough to be cautious about the property tax.

“We know a lot more stuff now,” he said. “In 2018 and ’19, if you’d have said to Jim Justice, let’s get rid of taxes, absolutely I would be in favor of getting rid of anything we could have gotten rid of, but it is a different animal today,” he said.

State lawmakers have long talked about having more flexibility with property taxes, particularly those that businesses pay on equipment and inventory. Last year, lawmakers passed a resolution that could allow changes on personal property tax rates.

Because it’s a constitutional issue, West Virginia voters have say-so on the matter through General Election ballots.

Property taxes are a main piece of how counties pay for services like school systems, ambulance services, libraries and more.

Earlier this month, boards of the West Virginia Association of Counties and the County Commissioners Association of West Virginia voted to oppose Amendment 2, the “Property Tax Modernization Amendment.” The first group represents county assessors, circuit clerks, county clerks, prosecutors and sheriffs.

Kent Carper

The groups cited loss of authority over about $550 million in “dedicated, constitutionally-protected revenues” — and “handing that money to the Legislature.” They also expressed concern over lack of consensus among the Senate, House and governor about a solid plan to make up revenue to the local governments.

“This really is a shifting of tax liability. You have to concede that. You just have to,” Kanawha County Commission President Kent Carper said today on “Talkline.”

 





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