CHARLESTON, W.Va. — State Senate Finance Committee Chairman Eric Tarr said Wednesday the Senate is planning a record-setting tax cut to come out of the upcoming 60-day legislative session.
“This would be the biggest tax reform I think that we’ve seen in the history of West Virginia and it’s a time when we can do it,” Tarr, R-Putnam, said during an appearance Wednesday on MetroNews “Talkline.”
Tarr said he’s talking about a $460 million rebate plan connected to the annual car tax and six categories of property taxes including the machine, equipment and inventory tax. He’s also a talking about a possible 15% cut in income tax that would total approximately $335 million.
Tarr and other Senate leaders wanted voters to approve Amendment 2 in November that would have opened the door for the elimination of certain property taxes but the measure was defeated after a statewide opposition tour taken up by Gov. Jim Justice and concern expressed by county leaders who receive property tax revenue.
Justice has already said he’ll send a bill to lawmakers on the first day of the session for a rebate on the car tax. Tarr said Senate Republicans plan to include other property taxes under that rebate plan.
“The governor has suggested that we do a rebate on just the cars when he was trying to use that as a tool to kill Amendment 2, so I think his rebate idea and I think our caucus think his rebate idea may be a way to go and we can do that on all six species of the property tax,” Tarr said.
.@EricJTarr4WV joins @HoppyKercheval to discuss the upcoming state legislative session and what topics will be addressed, including the tax plan. WATCH: https://t.co/yCFQ3nDJuy pic.twitter.com/Nbn1towppm
— MetroNews (@WVMetroNews) December 28, 2022
Business owners and residents would still have to pay the taxes but they could then file for a rebate and get a check from the government or a credit for taxes paid. Tarr said eliminating the taxes would be easier but that can’t be done because Amendment 2 was defeated.
“It’s clunkier than it needs to be,” Tarr said. “The simple way would be not to have a tax but that requires a constitutional amendment and that didn’t pass as we all know,” Tarr said.
Tarr said discussions are ongoing about how the income tax would be cut whether by reduction in all tax brackets or by reducing from the bottom.
The Senate, where 31 fo the 34 members are Republicans, will also be dealing with what’s getting close to a $2 billion revenue collection surplus. Tarr said some of the money can be used for one-time expenditures.
“Where we can go in and fix things, infrastructure-wise, deferred maintenance of those things that are drains on our general fund but if we fix them they are no longer a drain,” Tarr said.
Justice said during his Tuesday media briefing that he was preparing a flat budget to present to lawmakers when the session begins Jan. 11.
“It will be awfully close to a flat budget and for all practical purposes essentially just that,” Justice said.
He’s previously said he’ll propose another 5% pay raise for state workers including teachers and school service personnel.
When asked about that Wednesday, Tarr said it’s under discussion among senators. He said approving a tax rebate plan and income tax reduction would be a raise for everyone.