CHARLESTON, W.Va. — State Revenue Secretary Larry Pack says it will about another month before the final numbers are in but it looks like revenue numbers may trigger another reduction in the state’s personal income tax rate.
Pack said during an appearance Monday on MetroNews “Talkline” it will be a modest decrease at somewhere between zero and 2%.
“One percent is $22 million so it will still make a difference to taxpayers that they are going to keep a little bit more of their money,” Pack said.
State lawmakers approved and Gov. Jim Justice signed into law a 21.5% reduction in PIT during the 2023 legislative session. The law establishes a formula for further reductions made up of certain revenue collection numbers compared with the rate of inflation. Pack said it’s a conservative approach to further reductions.
“The PIT trigger was not designed to eliminate the PIT but it was designed to reduce the burden of personal income tax over time by small amounts,” Pack said.
The state is expected to finish somewhere close to $700 million in surplus revenue collections when the fiscal year ends June 30. Pack said that’s remarkable considering the 21.5% income tax decrease which sent about $600 million back to taxpayers.
A closer look at the numbers show an overall decrease of $800 million when year-over-year total collections through 11 months are compared to last fiscal year. personal Income Tax collections were down by $460 million through June.
Pack said the personal income tax rate is currently around 5%. He said it probably needs to get closer to 3% to begin drawing people into the state. He said that’s a debate for the next governor and the legislature.
“I do believe that we should do everything we can to get our personal income tax down into that 3% number. I do strongly believe it will help us continue to grow our economy. That’s a conversation I look forward to participating in with our next governor and next legislature,” Pack, who is the Republican nominee for state treasurer in the November General Election, said.
He added part of future discussion about lowering the personal tax rate will also need to include what services currently provided by the state can be reduced.