Just a few days before Gov. Jim Justice’s stated date for a special legislative session, it’s not clear what the specific agenda might be, the details of the proposals or the level of legislative support.
Justice announced on July 1 his desire for a 5% personal income tax cut that would be on top of other recent, major cuts. Then the governor a few weeks ago announced he would call a special session starting Sept. 30, which is this coming Monday.
The general topics were described as the tax cut, childcare legislation and supplemental appropriations. Lawmakers of both parties have said they want to see more specific detail before considering the policies in special session.
Of particular concern has been whether the state is in good enough financial condition — especially considering other future obligations — to commit to a tax cut amounting to an estimated $110 million a year at this time.
The governor’s senior adviser, acting Revenue Secretary Larry Pack, today said discussions are still ongoing with lawmakers.
“I believe we believe they want to get to a yes,” Pack said on MetroNews’ “Talkline.”
“It’s been really good discussions, and I think by the time we get together next Monday we’ll be able to move forward.”
Pack described increasingly active discussions with legislative leaders over the past few weeks. But he did not describe being ready to seal a deal with lawmakers.
“I think there’s agreements to try to get there, but that’s not an unusual situation because, again, we’re still discussing, still going through things. Generally, these things do not come together until we all come together at the session,” Pack said.
“It just takes a lot of agreement and a lot of agreement and you generally need a deadline to get there, and the deadline is the start of the special session. So we don’t think that’s unusual.”
Childcare and tax cuts
On childcare, West Virginia has faced increasing economic pressure on families and providers. At some point, West Virginia will need to make a funding adjustment to account for updates to the federal Child Care and Development Fund, the nation’s largest funding stream to help families afford child care, which now requires that states subsidize based on enrollment rather than attendance. West Virginia has been using stopgap funding to cover that for now.
Justice has said he’ll introduce the same version of a child tax credit that his administration proposed during the regular legislative session. He also described pushing for a new grant program through Workforce West Virginia that he described as being “performance-based.”
Without more detail, lawmakers and organizations pushing for greater support for childcare have questioned whether those proposals would adequately address the current issues.
On the tax cut, Justice first called for the 5% reduction on July 1, the start of a new fiscal year, catching legislative leaders by surprise.
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, which triggered an additional 4% personal income tax cut to go into effect.
Justice wants another 5% on top of that.
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.
“Governor Justice was elected to a four-year term, not a three-year-and-three-quarters term,” Pack said. “We’ve got a hundred days to go. We’re going to continue to move West Virginia forward. We don’t see any reasons why the State of West Virginia, our citizens, would want us to take the next 100 days off.”
Legislative questions
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.
House Majority Whip Marty Gearheart, R-Mercer, said today that he supports tax cuts. But Gearheart generally described the need for more detail about how the Justice administration plans to ensure the state can afford the additional 5% right now.
“I favor the continual reduction of the income tax rates in West Virginia,” Gearheart said on “Talkline.”
He went on to say, “The question, I think, isn’t on the revenue side. It’s on the spending side. And that is, how do we intend to control spending, all spending.” He asked, “Are we going to be willing to control that so we can put ourselves in a position that we can’t meet our obligations?”
Gearheart expressed confidence that continued reductions in the personal income tax could stimulate the state economy. But he acknowledged that would take time. So it’s important to know the details of the governor’s proposal, he said.
“There are a lot of things that affect whether this can work or not, and I’ve not had any of that information made available to me at this point — other than to hear the governor’s statement that he would like to cut income taxes 5% and rhetorically I agree.”
Delegate Joey Garcia, D-Marion, has been vocal for weeks about the need for lawmakers to be able to read the actual proposed legislation in advance of being summoned into special session.
“We should see a call right now. There’s no need to wait until next week. We should see the bills right now. That allows for open, transparent communication about what the best way forward should be,” Garcia said this week on “Talkline.”
He said now is not a good time to move ahead with the governor’s proposal.
“We’ve had some bad reports already from the revenue department, as far as taxes and as far as the amount coming in being lower, not just in last year, but in estimates. And you know, this is a good chunk of change over $100 ,million if we cut it another 5% right now. And I think one of the main points that we have is we don’t have adequate funding for our services right now, at this very moment,” Garcia said.