Both of West Virginia’s top candidates to be the next governor are expressing caution about an additional tax cut proposal by the current governor.
Lawmakers approved a 21.25% personal income tax cut that went into effect this year, and the state met economic conditions this year to automatically trigger an additional 5 percent. Gov. Jim Justice now wants to call lawmakers in to consider a 5% income tax cut on top of all that. It would amount to an estimated $110 million.
Justice, a Republican who is running for U.S. Senate, only remains in office as governor until the end of the year.
He says these decisions need to be made now.
“I’ve promised you that I’m going to run through the finish line and work every day as hard as I can for the voters, for the Toby and Ediths out there. Inflation’s eating us up right now. We all know that. Toby and Edith need us,” Justice said in a video announcing special session topics and using his names for average West Virginians.
“So I hope in every way, everybody in the Legislature hears that voice. Those people, it’s their money. And with all in me we can do it. We can do it; we can do it right now. We need another tax break.”
The candidates vying to be his successor each have said there should be more examination of whether the state can handle the additional cuts.
“As Mayor of Huntington, I successfully cut taxes, including the B&O tax, to encourage business development in our downtown area. But we did it responsibly, ensuring we didn’t bust the budget or jeopardize essential services. I’m all for giving our hard-working citizens a tax break when we can afford it, and that’s why I supported the 21.25% reduction in the state’s marginal tax rates passed by the legislature last year,” said Huntington Mayor Steve Williams, the Democratic candidate for governor.
Williams went on to say it’s not clear the state’s current economic conditions make an additional 5% tax cut viable right now.
The current fiscal year has begun relatively slowly. The most recent month, August, had revenue collections about $10 million below estimate. After two months of the new fiscal year, the state is $13 million below estimates.
“Furthermore, I feel an additional tax cuts should be targeted to working families and not the super wealthy,” Williams said.
“Meanwhile, West Virginia is facing a critical shortage of certified teachers in math, science, and special education. We have the highest number of children in foster care per capita in the nation, and working families are struggling to find child care. Unless these benchmarks are truly met, this push for an additional 5% cut smacks of a budget busting, election-year bribe designed to earn votes for the Governor’s Senate campaign, rather than addressing the real challenges facing our state.”
The Republican candidate for governor, three-term Attorney General Patrick Morrisey, also said decision-makers need to be careful. Morrisey said the decision should be made in the next regular legislative session, which is when a new governor would be in office.
“I applaud Governor Justice’s advocacy to lower our state income tax. Indeed, I plan to double down on that advocacy and advance the next phase of the Justice income tax cuts as the state’s next Governor,” Morrisey stated.
“At the same time, it’s crucial that any major changes to the income tax system be accompanied with changes rightsizing government and paying for these tax cuts — this is best achieved during the next regular session of the Legislature when we can make the best informed decisions.”
Current lawmakers have generally expressed caution about the governor’s 5% tax cut proposal because other tax cuts are still going into effect and because there are additional spending commitments also still going into effect — like the continued rollout of the Third Grade Success Act and estimated additional costs for more Hope Scholarship enrollment.
MORE: Legislative leaders are open to special session but want more details about governor’s proposals
Senate President Craig Blair, R-Berkeley, said today on MetroNews’ “Talkline” that it would be worth having fresh eyes examine the kinds of decisions that would allow for another tax cut. Blair said he supports Morrisey to be the leader for such an effort.
“If the governor can come in and actually show us where there are efficiencies to be had right now that can justify doing that extra 5% and being able to guarantee that we’ll be able to pay for this $110 million to make those reductions, there’s no need to wait to January,” said Blair, whose office means he is also the lieutenant governor.
“But it would probably be better to wait until January because Patrick Morrisey is going to have the same ability to set the revenue estimates and be able to take deep dives in — and fresh eyes. That’s one of the reasons we have term limits, so that we can have fresh eyes on our government.”