CHARLESTON, W.Va. — The letter was signed Thursday that will reduce the state’s personal income tax by another 4% on Jan. 1, 2025.
The letter, signed by state Auditor J.B. McCuskey and state Revenue Secretary Larry Pack, acknowledges the trigger mechanization for the tax cut was met.
Legislation approved by state lawmakers in 2023 establishes a process by which the personal income tax can be reduced annually if certain marks are met.
The trigger measures general revenue collections in a fiscal year minus severance collections compared to 2019 as a base year, adjusted for inflation. If collections are ahead of the base year, that would activate the trigger. That’s what happened in the most recently completed fiscal year. The cuts, according to the trigger, can go no lower than 10%.
State lawmakers passed and Gov. Jim Justice signed a bill last year to reduce the tax by 21%. Pack said Thursday the additional 4% will begin coming off next year.
“It’s effective Jan. 1, 2025. We just made it official. We’re very thankful for the governor’s leadership and legislature to allow us to continue to cut the tax burden of West Virginians,” Pack said during an appearance on MetroNews “Talkline.”
Pack said the the new cut will be about a $100 million savings for taxpayers, Pack said.
“That’s on top of the over $800 million tax cut the governor pushed forward and the legislature passed last year,” Pack said.
Meanwhile, Justice has said on more than one occasion that he plans to ask lawmakers to cut the personal income tax by another 5% during a special session either later this month or in September.
“We’ve done the right thing growing this economy; we’ve done the right thing keeping this budget flat. Why in the world would we now do the wrong thing? For people who want to sit on the sidelines and do nothing, then at the end of the day we will get exactly, ultimately, in the end — mark it down because I’m not going to be here very much longer — in all honesty we will get exactly what we deserve,” Justice said in early July.
But there doesn’t appear to be any widespread agreement on Justice’s proposal. He said as recent as this week that his office continues to talk with lawmakers.
Senate Finance Committee Chairman Eric Tarr, R-Putnam, has been one of the critics.
“Either you’re going to have to go in and reduce spending that is so bloody that you can afford that — bloody by, I mean, it is going to be politically challenging and it will be citizen uproar on some of those services because we’ve been catching infrastructure up, we’ve been getting sewer and water done, we’ve been getting roads done, we’ve been getting broadband down. You want to stop all that then go ahead and throw another $100 million in expenses there for perpetuity before we get the opportunity for revenue growth for the things we’ve done,” Tarr said last month on 580Live with Dave Allen.
Pack said what is known is the personal income tax is going down another 4% on Jan. 1.
“We’re able to let people to keep more of their money while at the same time we’ll able to run government efficiently,” Pack said.