The Senate Finance chairman says lawmakers are willing to listen to Gov. Jim Justice’s proposal for another 5% income tax cut — if there’s a financial plan to go with it.
“There’s no fire right now to come into a special session to say ‘Hey, we’ve got to eliminate another 5% of the personal income tax or the world’s going to fall apart,'” said Senate Finance Chairman Eric Tarr, R-Putnam.
Gov. Jim Justice this week announced his desire for a special session Sept. 30. “We’ve worked with the legislative leadership over the weekend. We’ve worked countless days in the past weeks. And really and truly, that date seems to be the best for everyone,” Justice said in a video announcement.
Tarr noted that regularly-scheduled legislative interim meetings are right after that, Oct. 6-8. “So to come in and act like this is urgent, to come in and tell the public that there was these conversations over the weekend with the legislative leadership that said ‘Hey, this is the day we need to come in’ when we had no discussions — I mean, it makes me wonder why he’s saying it,” Tarr said.
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.
West Virginia has already cut personal income taxes to a significant degree in recent months.
The state instituted a 21.25% personal income tax cut this year in a package that included further automatic reductions under certain economic conditions.
West Virginia hit those economic conditions this year, triggering an additional 4% personal income tax cut to go into effect. More automatic tax cuts could go into effect in future years if the economic conditions are met.
Justice wants another 5% based on his administration’s assessment of state finances. That amounts to an estimated $110 million.
“So I expect he’s probably going to put a bill on there of some sort about this idea for a tax reduction. And I hope he comes up with something completely creative,” Tarr said today on “The Dave Allen Show” on 580 WCHS Radio.
“If he can come up with something completely creative and say ‘Here’s where we’re going to take $110 million, $115 million of liability that is forward-looking off the books so we can swap it out,’ I think you’re going to see us looking at it. But if he does not do that, I think the bill’s going to be persona non grata. Because I think we understand we have a path to eliminating these taxes and you can screw it up; it’s fragile.”
Justice, a Republican who is running for U.S. Senate, has said he doesn’t want to just coast the last few months of his term and has set the additional tax cut as a goal, saying West Virginians need the relief.
The two candidates running to take over as governor, Republican Patrick Morrisey and Democrat Steve Williams, have made public statements advising caution. Morrisey says the decision would be best made during the next legislative session and should be accompanied by “rightsizing” steps for state government. Williams has said he supports tax cuts but only if the state’s conditions truly make them feasible.
During a briefing this week, Governor Justice questioned the motives behind any delay.
“We could say ‘Well, let’s just defer it and kick it on down the road and everything. Why? Why would we do that?” Justice said. “Are we doing that so somebody after me can take credit? Are we doing that because we have special projects that we want to keep the money and then put it into pet projects? I mean, what are we doing this for?
“I mean, at the end of the day, I’m here and I’m telling you wholeheartedly we need to reward our people with a bigger tax break right now. Inflation’s eating us alive. We’ve got the money. It’s sound and solid as it can be. Do it. Why wait? Why wait?”
Justice, in Wednesday’s briefing, left it to lawmakers to present his administration a proposal to cut government expenses to offset the proposed tax cut.
“If they can come to me with something that they would propose that would basically cut things and everything, we’ll look at it. We’ll look at it,” he said in response to a question by reporter Steven Allen Adams of the Ogden Newspapers.
The governor continued by indicating that any alternatives to his basic proposal would not be his responsibility and that the beneficiaries should be average West Virginians, who he calls Toby and Edith.
“We’ve been at this a long, long time. We can’t afford to just keep kicking the can down the road and not acting. And if that’s what we want to do then that’s on somebody else. That’s not on me,” he said.
“I’m trying with all in me to do exactly what I think we should do, and that’s the reason we’re here. We’re here for Toby and Edith. We’re not here for Jim Justice. We’re not here for a pet project. We’re not here to see who can get more fame as far as politically or whatever it may be. We’re here for Toby and Edith.”
Asked by reporter Charles Young of WV News whether his administration could present detailed proposals prior to the Sept. 30 date, Justice indicated it would.
“We’re working with the Legislature. Surely to goodness we can get that done and get it out,” Justice said. “My answer ought to be yes, and is yes. I hope to goodness we can get that out and the sooner the better.”
Delegate Joey Garcia, at a press conference by Democrats this week, said the administration has a responsibility not to drop its proposals at the last second.
“The most important thing is, we can’t see these bills on Sept. 30,” said Garcia, D-Marion. “The governor has said we’ve had enough time to negotiate. Well, he has enough time with his legal counsel and his staff to put together the bills that we’re going to be reviewing before that, so we can collaborate and find issues that we can solve instead of coming there with what has happened in the past, these bills just being dropped on our head.”