Stephen Baldwin, Senate Minority Chairman, listens to the committee’s testimony during a meeting of the Senate Finance Committee. (Photo provided) Brent Boggs, minority chairman of the House Finance Committee, attends a meeting. (Photo provided) Eric Householder, chairman of the House Finance Committee, is chairing a meeting earlier this week. (Photo provided)
Eric Tarr, chairman of the Senate Finance Committee, listens to statements from the agency during a budget hearing. (Photo provided)
CHARLESTON – As Governor Jim Justice prepared to meet with lawmakers on Friday to sell his plans to cut income tax and raise taxes, heads of the legislature’s two finance committees said they were open to the judiciary’s proposals.
The judiciary on Thursday released details and a bill for a one-year reduction in income tax classifications by 60 percent and a tax break of $ 52 million for families earning less than $ 35,000 a year. The total tax cuts amount to more than $ 1.087 billion.
The judicial tax reform plans also include proposed tax increases of $ 902.6 million, including a 1.9 percent increase in consumer sales and use tax. Removal of VAT exemptions for certain professional services; a tax on certain luxury goods; staggered rates of severance tax on coal, natural gas and oil, which increase as the prices of these fossil fuels rise; and increased taxes on cigarettes, tobacco products, e-cigarettes, beer, wine, liquor, and soda.
Speaking of the State Capitol Building in Charleston on Friday during its fourth virtual town hall promoting the tax reform plan, Justice said West Virginia must do something great to reverse not only the exodus of residents from the state, but the people as well induce them to move to West Virginia live, work and play.
“We have tried to include a method in our plan that will eliminate our personal income tax in the state of West Virginia and provide an opportunity to bring that opportunity to this state incredibly.” Justice said. “We have had problems generating population growth in West Virginia over and over again. It will do it. “
According to the US Census Bureau, West Virginia was the only state that lost population in terms of population growth between 1950 and 2016, losing approximately 500,000 residents during that period.
“The whole world is looking at West Virginia today for addressing the pandemic from an economic, health and safety perspective. Now is the time to really drive population growth to West Virginia.” Justice said. “We have to find a way to move the needle positively.”
The reduction in personal income tax receipts coupled with the tax increase receipts still results in a $ 185.1 million funding gap. The judiciary proposed cutting the state’s general revenue budget by $ 25 million, along with $ 10 million in potential savings from retired government employees and an estimated annual revenue growth of $ 60 million, this hole could drop to $ 90 million Dollars to be reduced.
The first look many lawmakers had of the judiciary’s proposal was the executive summary and draft of the legal language published on Thursday. The judiciary said the bill had been submitted to lawmakers but would not be formally presented to the House of Representatives and Senate until next week.
Once introduced, the legislature’s two finance committees will have to review the bill. Both committees have worked hard to hold hearings with government agencies as the general revenue budget for fiscal 2022 comes together. Justice said he had reached out to lawmakers on both parties for feedback in the last two weeks when the plan came together.
Senate Finance Committee chairman Eric Tarr, R-Putnam, said he was pleased with what he saw about the governor’s tax reform proposals. He said the bill, while not perfect, is a good place to start when discussing an income tax exit – long a goal of Republican lawmakers.
“If we can’t get perfect, then what can we bring out so that we can keep making something that will lead to a more perfect model in the years to come? If you’re currently turning off 60 percent of income tax, this is probably one of the best scenarios I’ve ever seen to try. I appreciate the conduct of the judiciary. “
Stephen Baldwin, Senate Minority Chairman, D-Greenbrier, is also a member of the Senate Finance Committee. He said Justice’s plan reminded him of the governor’s 2017 plan to close a budget gap of nearly $ 500 million with increases in consumer sales tax, a business and occupation tax, and a property tax. The Republican-led legislature rejected this plan from the judiciary, then a Democrat.
“I think it’s very complicated” Said Baldwin. “I remember looking at a very similar package in 2017 that just fell apart and collapsed under its own weight because it was so complicated. That seems very similar. “
With just 34 Senate members and 23 Republicans, the judiciary has fewer votes to argue in the upper chamber. On the House side, the judiciary has 100 members to convince, including 77 Republicans. Eric Householder, chairman of the House Finance Committee, R-Berkeley, said he supported an income tax waiver, but the other proposals in the plan needed to be reviewed by the Republican caucus.
“I applaud the governor for putting his thoughts on paper while he is in a frame position. It’s going to be a tough lift, make no mistake. “ Head of Household said. “I’ll put the bill in front of our caucus and we’ll see which direction the caucus wants to go … It will all really depend on the mood of the caucus and which way we want to go.”
Brent Boggs, minority chairman of the House Finance Committee, D-Braxton, was the previous chairman of the committee before 2015, when the Democrats held a majority in both houses. Boggs said he plans to be open to the justice plan and the caucus will likely meet with justice as early as Friday afternoon to discuss the plan.
“Of course everyone likes to get on the tax cut, but this will be a tax cut on the one hand and a tax increase on the other, the extent of which we do not really understand because we have an overview,” Said Boggs. “I think our caucus will be open to listening to what the governor has to say, listening to what the parties involved have to say, and going from there.”
Steven Allen Adams can be reached at email@example.com
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