West Virginia Revenue Bill Gets Overhaul in House
No timetable for Senate vote on the matter
WHEELING — The West Virginia House Finance Committee rewrote and advanced its own version of a state revenue bill Thursday, eliminating a sales tax increase and an income tax reduction passed by the Senate.
Also gone in the House version is a tiered system for assessing severance taxes on coal and gas companies, according to Delegate Erikka Storch, R-Ohio, a finance committee member.
The House version instead seeks to phase out all income tax on Social Security over the next three years, she said.
The action came on the sixth day of a special legislative session called by Gov. Jim Justice to set a general fund budget for fiscal year 2018. The session began May 4 before being recessed, and resumed Monday.
House Bill 107, the Tax Reform Act of 2017, rejects the plan set forth by Justice and Senate leadership to raise the state’s sales tax to 6.95 percent, while dropping income tax rates by 15 percent.
The provisions were replaced with language exempting those receiving Social Security benefits with incomes under $100,000 from paying income tax. All taxation on Social Security income would be removed under the House plan over the next three years, according to Storch.
A similar plan was proposed by Senate Democrats this week, but defeated along party lines.
Military income also would be exempted under the House proposal. And the personal exemption on state income tax forms also would be increased from $2,000 to $2,500 for those earning less than $100,000.
The Senate revenue bill offered a tiered system for assessing severance tax that would have had companies paying a lower rate on their producing during lean times, and a higher rate when revenues were higher.
Storch said the House couldn’t give such a break to the energy producers.
“If we do, we have to increase sales tax by at least 0.25 percent,” she said.
The committee substitute for HB 107 passed the House Finance Committee by voice vote with seemingly bipartisan support, according to Storch.
The measure was given immediate consideration on the House floor, and read the first time Thursday evening.
Also on Thursday, the House passed its first piece of legislation during the special session.
House Bill 106 — a measure to retain state employees benefits in the event of a government shutdown — passed with a vote of 82-2 after some changes by the House Judiciary Committee.
All local delegates voted in favor of the measure and were present for the vote. There were 16 delegates from elsewhere in the state absent from the House on Thursday.
Judiciary Committee Chairman John Shott, R-Mercer, explained the House had concerns about the version of the bill being considered in the Senate. That measure gives the governor the ability to furlough state employees in times of a “fiscal crisis.”
Under the House version passed Thursday, the governor’s authority applies only when there has been a budget passed and vetoed by the governor, or when the Legislature fails to pass a budget to avoid a government shutdown on July 1. It also specifies any unused funds in an agency’s account could be rolled over to provide services, or be reappropriated by the Legislature.
The House is set to reconvene at 11 a.m. today.
Action at the Capitol Thursday took place with most Senate members back home in their districts. Leadership opted to send members home Wednesday night as they did not have any legislation to consider.
Senate Majority Leader Ryan Ferns, R-Ohio, said as of late Thursday he had not received word from Senate President Mitch Carmichael, R-Jackson, that senators would be called back to Charleston today. He expects the Senate will likely convene again on Monday.