MORGANTOWN, W.Va. — The state Senate is wrestling with the budget and looking for ways to maintain the priorities of the state while looking at Gov. Patrick Morrisey’s urging for a 10 percent cut in the state’s personal income tax.
Sen. Mike Oliverio, R-Monongalia, said the first obstacle is Morrisey promoting a 10 percent cut in State of the State Address when he only had a five percent cut in his proposed state budget.
“The reality is that each one of those percentage points equals about $25 million,” Oliverio said Friday on WAJR’s “Talk of the Town.” “So he handed us a budget and then said, ‘Oh, by the way, can you cut another $125 million out of here?'”
According to Oliverio, state agencies have already had a two percent budget cut across the board in the governor’s budget. A second trim to the available operating cash for some units of government could be too much to take and continue to provide their services
“Many of the state agencies have already faced a two percent across-the-board cut in his proposal,” Oliverio said. “I think we’re going to have a difficult time achieving that 10 percent cut.
Legislation passed in 2022 to cut the personal income tax has triggers tied to the economy that signal when a cut can be made. Those triggers have not been met, meaning the economy has not shown enough growth to make a cut to the tax based on the 2022 legislation.
“If we were to stay true to our legislation, we wouldn’t cut personal income tax at all,” Oliverio said. “Now, the governor really wants to do this; it’s really important, and it’s a high priority of his.”
Morrisey beat the drum for a tax cut during an appearance last Thursday in Parkersburg with national tax cut advocate Grover Norquist.
“Whether it’s the price of energy bills, groceries, or you just want to take your family out to dinner on Friday night or go see a movie,” Morrisey said during the event. “That’s your money, that’s the people’s money, and never let anyone forget that.
Oliverio said the total West Virginia budget is about $21 billion, with $5.5 billion in general revenue. Of the $5.5 billion in general revenue, about half goes to public education and the balance to fund the operations of the government. Since 2022, the personal income tax has been cut by 27.25 percent, and over the last two decades, the overall financial health of the state has drastically improved, according to Oliverio
“We’ve eliminated the personal income tax on our senior citizens’ social security benefits, and we have benefits for disabled residents now with income tax reductions,” Oliverio said. “We’re looking at reducing the Homestead Exemption, and we have a viable proposal in front of us.
Fixing PEIA is something Oliverio has watched slip away, and this year he hopes lawmakers can settle on something that will provide relief for state workers and retirees
“If we could have put $10 million more into PEIA, then those retirees would not have had a 10 percent increase in their premiums, and I think we can do some of those things,” Oliverio said.