CHARLESTON, W.Va. (AP) — Legislation that would reduce personal income taxes by 10% in West Virginia cleared the House of Delegates on Friday.
Democrats in the Republican-controlled House complained that the bill will hardly help lower-income residents. The bill was adopted 76-20 and now goes to the state Senate.
gov. Jim Justice tried to reduce income taxes by 60% last year as a way to spur population growth in a state that saw the highest percentage of residents leave over the past decade. The proposal was unanimously rejected in the house.
“The goal has always been to do an incremental approach, a more slower, more moderate approach,” said House Finance chairman Eric Householder, a Republican.
But the current bill drew complaints from Democrats because it doesn’t give a greater percentage of money back to lower wage earners. Amendments to do just that were rejected.
For instance, someone making $20,000 would receive $7 back under the proposal, while someone making $92,000 would get $232 back.
“We need to step back and look at these numbers and say who is it that really needs to benefit from tax relief?” said Kanawha County Democrat Larry Rowe. “This is not significant to the people who need the help.”
Braxton County Democrat Brent Boggs said 70% of the tax cut will go to 20% of the taxpayers.
“That’s troubling to me,” he said.
The initial tax cut, if approved, would be effective next January and cost the state $96 million in surplus revenue in the next fiscal year and $265 million in subsequent fiscal years if no further changes are made.
Some delegates were concerned about the state’s fiscal health moving forward. Although the state currently has a solid surplus, there are plans to give state employees a 5% pay raise and the Department of Health and Human Resources’ anticipates a potential shortfall from Medicaid.
The bill would divert half of the state’s general surplus normally placed into a “rainy day” fund and instead put it into a new savings fund set up to help pay for future tax cuts.
“There is a train coming straight at us of financial responsibility,” Rowe said. “And it can either run over us, or we can dodge it, but we’re going to have to deal with it.”
Mercer County Republican Marty Gearheart said the bill takes into consideration “all of the possible problems that we might have.”
“We’ve tried to be smart and to do it appropriately and put ourselves on a path to really, really, really over time relieve the tax burden from West Virginians.”
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