Gov. Jim Justice hit the road Wednesday to push his 50 percent personal income tax cut proposal that has been sitting dormant in the West Virginia Senate since last week.
The House of Delegates passed House Bill 2526 on January 18. The Senate received the bill the next day and assigned it to its Finance Committee.
Justice Tuesday announced town hall meetings this week in Parkersburg, Beckley and Wheeling to discuss tax cuts with the public.
During an appearance Wednesday in Parkersburg, the governor appeared with Revenue Secretary Dave Hardy and House Finance Committee Chairman Vernon Criss R-Wood to rally support for the plan.
“We’re asking for your help in letting the state Senate know that this is a plan that will work,” Criss said. “It’s not a dream opportunity. It’s not a bait-and-switch to get you to pay more taxes. This is really a tax cut and a reduction in the dollars going to the state.”
Justice’s plan would reduce personal income tax by 30% in 2023 and 10% in each of the next two tax years. It would also remove $163 million in tax revenue from the state budget in the first year and $1 billion the following year. That number would rise to $1.5 billion in lost revenue when the reduction is fully implemented.
Proponents of the tax cut say the money would flow back into West Virginian pockets. Those opposed to the plan say the lost revenue is money the government shouldn’t have to address widespread staff shortages in education, social services and corrections, to fix struggling agencies like the Department of Health and Human Resources and the West Virginia Public Employee Insurance Agency.
These and other concerns have recently been raised in the Senate.
Criss said Wednesday that the bill will create the Personal Income Tax Reserve Fund, in which the state will set aside $700 million from its projected $1.7 billion budget surplus as insurance against revenue loss. tax.
“Our goal is the same one it was in 1987 when I was in the Legislature: Eliminate the personal income tax in this state altogether,” Criss said. “It’s important to the future of this state that we do this.”
Hardy said state revenues increased 22% and are at historic levels. Opponents of the bill, including the West Virginia Center on Budget & Policy, as well as members of the Senate, have warned those figures are affected by severance tax revenues that are fueled by the fluctuating cost of natural gas and coal and are probably change.
On Wednesday, Hardy noted that the tax cut won’t affect funding for essential services. He was recently criticized on that issue by Senate Finance Committee Chair Eric Tarr, R-Putnam, who argued that those programs could be impacted due to lost tax revenues due to the governor’s proposed cut.
“I don’t want anyone walking away today with the idea that this dollar tax return will result in a big budget cut for the state of West Virginia,” Hardy said.
The governor noted broad support in the House, where the plan passed 95-2, with three delegates absent. Only Monongalia County Democrats Evan Hansen and John Williams voted against the proposal.
Even Justice, whose family-owned companies have been sued on multiple occasions for failing to meet their obligations, pointed to his own business savvy as a reason to trust the plan.
“And you have me, who came to you as a businessman, and probably has good business acumen, because, remember, my grandparents never had indoor plumbing. We just had to go in and dig and dig and dig and dig, and behold, their nephew is sitting here as your governor. You just can’t drop all this stuff out of the sky,” said Justice, who inherited a coal mining business from his father.
The justice cautioned against comparing his tax cut proposal with one enacted in Kansas in 2012 that, according to NPR, caused huge problems due to shrinking revenues. That state’s governor at the time, Republican Sam Brownback, called it the largest tax cut in Kansas history. He has been lauded for his potential to stimulate the economy.
In 2016, the Republican-controlled legislature in Kansas had to roll back tax cuts due to dwindling revenue streams and a lack of money for roads, infrastructure and essential services.
Kansas now has a Democrat as governor.
“We are absolutely here to help educate you on what it is and help put to rest any concerns that may arise about the boogeyman,” Justice said. “’Oh, we don’t want to be Kansas.’ I mean, come on. Seriously, honest to God, do you think I’d be here, after doing what we did, and then throwing it all away?
Roger Adkins covers politics. He can be reached at 304-348-4814 or email [email protected]. Follow him on Twitter @RadkinsWV.
