Delegates passed legislation to cut personal income taxes by 5 percent, although they amended out a provision in the bill that also would have increased taxes on vape products.
The vape tax increase would have increased general revenue by an estimated $16 million, but a majority of delegates voted to remove that. Delegate Marty Gearheart, R-Mercer, said the structure of one tax up and another down “is insulting.”
Because that change was made, the bill will now go back to the state Senate in the final hours before the end of the regular legislative session.
Delegates passed S. B. 392, relating to personal income tax reduction, on a vote of 88-8 with three absences.
“Every wage earner in this state deserves the 5% tax cut that has been brought by this administration,” said House Finance Chairman Vernon Criss, R-Wood, in response to other amendments that would have changed the tax cut structure.
Gov. Patrick Morrisey has repeatedly said his administration has done the hard work of identifying ways to account for the 5% cut, but he has consistently expressed a wish for 10 percent.
“I proposed a ten percent across the board income tax cut, the Senate gave that to me, but the House had zero. I think the final budget looks to leave it at five,” Morrisey said during a rally this week in Greenbrier County.
“What I want to say to folks is thank you for the five and we’re going to keep coming back to get to the ten.”
State officials under the prior Justice administration established a trigger system to cut income taxes when the state reaches particular measurements for economic growth, but this tax cut would occur outside that framework.
The 5% tax cut is estimated to amount to about $125 million in state revenue. A 10% tax cut would be about $250 million.
The vape tax increase is an estimated $16 million more in state revenue.
This year’s overall general revenue budget is roughly $5.5 billion.
The governor’s revenue estimate essentially lowered spending levels to give space for the 5% tax cut amount in the budget.
“I’m hoping that we do not have a quote-unquote hiccup in our revenues for the coming year, that we’ll still be able to absorb this in our revenues,” Criss said under questioning by other delegates.
During debate on the House floor about the tax bill, delegates voted down several additional amendments, including on dealing with taxes on wagering on interactive gaming providers.
Another, offered by Delegate Sean Hornbuckle, D-Cabell, would have shifted more proportional tax cuts to lower brackets. And another by Hornbuckle would have instead offered a child tax credit of $350 per child.
Hornbuckle, in a floor speech, acknowledged that his proposals were different from the tax bill in front of lawmakers.
“This would give a lot of relief to hard working families,” he said.
The West Virginia Center on Budget & Policy nonprofit think tank said lawmakers have chosen tax cuts that mostly benefit the state’s wealthiest households over any new funding for public schools, sufficient investments in infrastructure and clean water or programs that meaningfully help workers and families afford the basics.
“As a result of their misplaced priorities, more schools will close, more school staff will be laid off, more children will be consigned to a failing child welfare system, and more families will continue to go without clean water,” said Kelly Allen, executive director.