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Lawmakers pass budget bill, state worker pay raises and Social Security tax phase-out

After a couple of slow-motion days, senators and delegates passed a $4.996 billion budget described as a compromise between the chambers.

The budget bill had been held up while Senators pushed the House for passage of an unemployment benefits bill. Once that passed, senators agreed to pass bills reflecting pay raises for state workers and phasing out state taxes on Social Security.

“Major changes were made in negotiations with the House,” said Senate Finance Chairman Eric Tarr, R-Putnam.

Tarr characterized the budget bill as reflecting average 5% pay raises for state workers through general revenue funds.

Gov. Jim Justice had introduced a $5.22 billion general revenue budget. There’s still some talk about a special session in May to round out some budget items, especially if some questions about state financial pressures can be resolved by then.

In the House, Delegate John Williams, D-Monongalia, objected to the weighty topic at, literally, the 11th hour.

“In general, with this budget process, something needs to be done to where we aren’t having millions of dollars moved around and we have this dropped on us at 10:55 on the last day of session,” Williams said.

Earlier in the evening of the final day of the regular legislative session, senators passed a bill representing pay raises for some state employees and another phasing out taxes on Social Security benefits.

The bills are key components of what could shape up as the state’s general revenue budget. The Senate earlier tied each of the bills to economic triggers, but backed off that format on Day 60 of the legislative session.

The pay raises for state employees and cut for the state taxes on Social Security were two of the main proposals advocated by Gov. Jim Justice in his State of the State address.

The Senate bills completed the legislation because the House of Delegates had already voted in favor. So now they go to the governor for his signature.

House Bill 4883 provides pay increases for state workers whose pay scales are in state code. So, State Police personnel and public school educators would be affected.

That means State Police personnel would receive a $2,900 annual salary increase. Teachers would receive a $2,460 annual pay increase. And school service personnel would receive an additional $140 a month.

Other state employees in line for raises are reflected in the general revenue budget

The Social Security tax phase-out passed the Senate on a 32-0 vote.

The estimated financial effect of fully eliminating income taxes on Social Security benefits would be a little more than $37 million.

The phase-out would mean a 35%t cut retroactive to Jan. 1, 2024; 65% in 2025 and 100% in 2026.

The legislation would build on a 2019 bill signed into law by the governor to exempt Social Security income from personal income taxes for most West Virginians, particularly those in lower tax brackets. That was also a three-year phase-out.

“That money was earned by each of those workers,” said Senator Mike Woelfel, D-Cabell. “The time has come for us to eliminate this onerous tax.”

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