CHARLESTON, W.Va. (WSAZ) – After hosting several virtual town halls and speaking with lawmakers for weeks, Governor Jim Justice took the first step to pursue his state proposal to lift state income tax Thursday.
According to the Justice Bureau, the governor has submitted a bill to West Virginia lawmakers that he believes will be “a golden opportunity to change the tax structure of West Virginia.” The bill is expected to be officially presented to the House of Representatives and the Senate on Friday.
“At the end of the day, who in the world would vote against putting more dollars in every West Virginian’s pocket?” Justice said.
Western Virgins pay around $ 2.1 billion in state income tax each year, and that funding makes up about 43 percent of the state budget.
To make up for the lost revenue, Justice proposes a 1.9 percent increase in state sales tax. The state would also impose taxes on coal, oil, and natural gas, in addition to introducing a luxury tax and introducing sin taxes on items like soda, alcoholic beverages, and cigarettes. For the invoice summary, click here.
“We may never have such an opportunity again,” Justice said. “Because of the way we handled the COVID-19 pandemic – how we saved lives, had the best vaccination program in the country, and kept our economy moving – West Virginia is currently in the spotlight of the world. This is the time to take our opportunity! “
Justice said the remaining budget gap will come from more people and businesses moving to the state over time, including increasing wages, increasing home values, engaging more businesses, and making the state more attractive to home buyers . Its proposed flat-rate budget for the next three years will also fill the gap.
“You can’t just do that overnight,” said Doug Skaff (D-Kanawha), minority chairman. “You have to have solid concrete evidence that we have revenue streams to make up for this. The last thing we want to do is take away one tax that you pay in your left pocket and add another tax that you pay in your right pocket. It’s just not good politics and it’s just not good for West Virgins. “
“You will see more growth because you will see people wanting to come to our state, because obviously we have something to offer, it is more attractive and I think you will see more and more growth in our budget if we get this over the finish line can bring, ”said Del. Eric Houseolder (R-Berkeley), Chairman of the House Finance Committee.
The governor claims that every West Virginian will benefit from his plan. The governor’s office said all income brackets less than $ 35,000 per year will receive a tax rebate check under the plan. Low and high income taxpayers will all see a net positive benefit when this plan comes into effect.
“We all have the building blocks in our state. We have an economy that is really on the starting grid, some of the greatest people you will ever find who are smart, kind, faith-based, and hardworking people, along with four of the best seasons on earth with more natural beauty than you could possibly be maybe imagine. But now we have to take a big step to overdo it. If people look at any other population map 70 years from now, West Virginia will be right up there with the top states in the country, ”Justice said. “The final piece of this puzzle is eliminating our personal income tax. So I propose a plan to make this dream come true, starting with a 60% reduction in state income tax for the first year. “
Justice said the proposal would benefit border communities like the city of Huntington. Mayor Steve Williams said around 25,000 people come to work from out of town every day, many from Ohio and Kentucky, and he hopes the tax incentives will encourage people to live and work in West Virginia.
“So we go to great lengths to make sure we spice up our neighborhoods to make them attractive because the company is coming,” said Williams. “We have the opportunity to do our best.”
Williams expressed concern about the potential loss of revenue from people who go to other states to buy products without the increased sales tax. He wants to ensure that the legislation is thoroughly debated to ensure that critical services, including public education, are not adversely affected by this proposal.
“I worry that we are still in the middle of the pandemic and we really don’t know what the lingering and lasting effects will be,” Williams said. “My fear is the last thing in the world you would want to do to change your tax system in the middle of a pandemic when we don’t know what to expect.”
The total population of the United States doubled from 1950 to 2016, according to a press release from the governor’s office. During the same period, 49 out of 50 states recorded an increase in population. The only state that lost its population during this period was West Virginia. Between 2010 and 2020, the population in West Virginia fell 3.8 percent. This is the largest population decline in the country.
“There is evidence that so many non-income tax states are far better off than we are,” said Householder. “That’s what we have to focus on.”
One of the nine states with no income tax is Florida. Florida has seen massive economic growth since 2015, including the location of one of eleven new jobs created across the country, said Florida Chamber of Commerce chief economist Dr. Jerry Parrish.
“We have the incentive to bring in more people and make them make more money,” Parrish said. “The more money you spend on taxable goods, the more goes to the state government.”
Parrish said that most states across the country are actually increasing their income taxes, making states with no income tax more attractive to people looking to work remotely or start a business. Florida makes up for the lack of an income tax with sales tax and other local taxes.
If West Virginia removes income tax, it will be the northernmost and easternmost state with no income tax, Justice said. He sees this as an opportunity that the state cannot miss. Many people want to move to places that have successfully managed the COVID-19 pandemic and have resources for outdoor recreation.
“This may be a drain for a Baltimore or a DC,” Justice said. “Or a Philadelphia or New York or wherever it is. People will come to West Virginia across from Ohio and Pennsylvania, they will absolutely come. And there’s going to be so much more potential goodness here that it’s incredible. “
“As you increase property values and demand for that property, you increase the property taxes associated with it to meet more basic needs, especially education,” said Senate President Craig Blair (R-Berkeley).
Blair said investments in broadband, roads and other critical infrastructure are needed to get people seriously considering moving to West Virginia. He sees this proposal as an opportunity to “hit the gas pedal and get us where we need to be in this state, and have the economic opportunity for all of our people, not just the select few who happen to be a good one Pay have job. “
Copyright 2021 WSAZ. All rights reserved.