Gov. Jim Justice added several items to the call of the special legislative session, including a bill that would shift a proposed personal income tax from the 5% that the governor has touted to a 2% tax cut instead.
After lawmakers received the tax cut bill, members of the state Senate took it up and passed it during an afternoon floor session. The House Finance Committee discussed the tax cut bill and its potential effects on state budgeting before advancing it to the full House of Delegates, which next meets in an 11 a.m. Tuesday floor session.
Besides the tax cut, some of the additional items include:
- A resolution to honor Hershel “Woody” Williams with a statue in the National Statuary Hall Collection.
- Funding for certain federally-funded broadband expansion programs to come from the West Virginia Economic Development Authority.
- Supplemental funding for West Virginia University, Marshall University, Concord University, Shepherd University, and New River Community and Technical College.
- The allocation of $5 million for statewide EMS program support.
The additional 5% personal income tax cut was estimated to equate to about $110 million that would not be available to pay for the expenses of state government.
The 2% that lawmakers will be considering instead would be around $46 million, state officials said.
“We feel comfortable with 5%. The Legislature feels more comfortable with 2%. That’s just how it works,” Acting Revenue Secretary Larry Pack, R-Kanawha, told members of the House Finance Committee.
House Finance Chairman Vernon Criss, R-Wood, said that even the potential 2% tax cut will help provide a break to citizens.
“It’s working in the right direction. That’s what we’ve said all along. It’s the idea behind his tax cuts and our tax cuts that we’ve negotiated over the past three years — to get money back into the pockets of West Virginia citizens. And the idea that we’re still continuing to do that, that’s the most important part,” Criss said.
“Regardless of what the percentage is, we recognize that we have got funds available to give back to the citizens of West Virginia.”
This tax cut would be on top of a 21.25% income tax cut that just went into effect, plus another 4% tax cut that will occur automatically because the state hit an economic trigger.
Last week, during a state administration briefing, Justice said the particular figure doesn’t matter as much as the state demonstrating that it’s steadily whittling away the income tax.
“What we need to do – the 5% isn’t do-all, end-all. What we need to do is continue to show the world that West Virginia is on the pathway to getting rid of the personal income tax,” Justice said last week.
“If we do 5%, we’ll be at 30. If we do 3%, we’ll be at 28. Who cares. Who in the world cares about that? We need to absolutely show the world that West Virginia is on the way to getting rid of your personal income tax.”
Senator Mike Oliverio, R-Monongalia, said the 2% is an achievable amount. He said the latest tax cut is best considered as part of the overall set of cuts.
“We think we’ve made great strides in the last 18 months of relieving the tax burden to our citizens and positioning our state for the future,” Oliverio told WAJR Radio.
During this special session, lawmakers have also been considering multiple supplemental appropriations, including some to agencies that now project being well behind on their original appropriations or that need a significant amount of deferred maintenance.
“Lawmakers need to get their arms around the state’s structural budget needs before enacting additional permanent tax cuts,” said Kelly Allen, executive director of the West Virginia Center on Budget & Policy think tank.
“Just today, they heard from PEIA and Division of Corrections officials that their ‘flat’ budget allocations are not enough to fund those agencies’ operating costs — and surplus allocations that have been bridging the gap are unlikely to be available even before additional tax cuts.”