West Virginia Gov. Jim Justice Brings Back Income Tax Cut in Budget Battle
WHEELING — West Virginia Gov. Jim Justice asked state lawmakers Thursday to take “one more try” at tax reform, and presented them with another plan to reduce personal income tax rates while generating additional revenue for the state.
The Senate went on to pass Justice’s revenue bill, as well as a $4.3 million budget for 2018 that restores funding Medicaid and higher education, which the Senate had previously cut.
Senate Finance Committee Chairman Mike Hall, R-Putnam, said the budget bill was the same as the one offered by Justice near the beginning of the session last month, but with the extra dollars generated by the revenue bill approved by the Senate.
The House is expected to vote on both measures today.
“Now, this is it,” Justice said prior to the Senate’s vote. “If this doesn’t happen, what’s going to happen are terrible things — big cuts. Big cuts to (Department of Health and Human Resources), our universities and K-12. It’s not going to be good.
“We’re going to hurt our teachers. We’re going to hurt our miners, and people we don’t need to be hurting,” he added.
Justice’s plan includes 5 percent reductions in personal income tax over each of the next four years, with triggers to be set.
It creates no tax breaks for those earning above $150,000, and focuses on lower- and middle-income earners, according to Justice.
Those earning $20,000 or less annually would receive a $150 rebate at the end of the year, in addition to their income tax savings, and those in the next higher bracket would receive $100.
The plan also includes a hike in the consumer sales tax from 6 percent to 6.5 percent.
The budget bill includes a 2 percent pay raise for teachers, no cuts to Medicaid and lesser cuts to higher education.
The Senate Thursday night passed the revenue bill with a vote of 30-2; and the budget bill, 29-2. Senate Majority Leader Ryan Ferns, R-Ohio, and Sens. Mike Maroney, R-Marshall, and Charles Clements, R-Wetzel, all voted in favor of both measures.
Sen. Ryan Weld, R-Brooke, was absent for both votes. Late Thursday, he said he was attending a professional development conference in Charleston, S.C., and had been prepared to make the trip back to Charleston, W.Va. to make the vote if needed.
He said he made the 14-hour round trip already once this week to vote on a budget bill in the Senate, and was ready to do it again.
Weld said Senate leadership had given him permission to attend the conference, and told him they would call him back if needed. He was told of the votes on Thursday just three hours before the first occurred after 8 p.m.
“I didn’t have time to make the trip, and I’m very frustrated,” Weld said. “I would have voted in the affirmative.”
Justice convened what was supposed to be a smaller meeting Thursday afternoon to unveil his plan to a select number of lawmakers and lobbyists.
“The governor called in a bunch of us — representatives from each caucus in the House and Senate,” Ferns said. “But the House Democrats sent their whole caucus.”
There were also lobbyists present, as well as representatives for West Virginia University President E. Gordon Gee, and Marshall University President Jerome Gilbert.
“He wanted to take one more shot at getting a tax reform proposal together everyone can get on board with,” Ferns said. “It has further compromises than what was done earlier.
“(Senate Republicans) are not particularly crazy about it, but it has the same goals we were shooting for.”
Justice’s private meeting with lawmakers and lobbyists ended abruptly when Democrats present were seen walking out of the meeting in disgust.
Those contacted said they had taken issue with remarks made by Sen. Robert Karnes, R-Upshur, that targeted years of Democratic leadership in the state. They wouldn’t say specifically what those comments were, but loud voices were heard inside the governor’s conference room.
Delegate Shawn Fluharty, D-Ohio, said he was not comfortable with the meeting because media was not allowed inside, and there were enough Senate members present to constitute a public meeting. He also didn’t like that lobbyists were in attendance.
“(Karnes) made derogatory remarks about Democrats outside the bounds of legislative decorum,” Fluharty said. “The irony is Republicans hold a super majority and don’t need a single Democrat to pass a budget. But here we are.”
Delegate Patrick McGeehan, R-Hancock, said a balanced budget that reduces spending should be passed.
“I would like to lower income taxes, so I do like that aspect of his plan,” he said. “And I’m sympathetic to those who genuinely support the idea. The problem is, seldom can you achieve the sort of economic benefits that are aimed at by making the government bigger and more expensive in the short run.
“Hopefully focus comes back to a balanced budget that controls spending, without increasing the burden of taxation,” McGeehan said.