House of Delegates OKs Justice Tax Cut Plan; Future Uncertain in Senate
photo by: Photo courtesy of WV Legislative Photography
W.Va. House approves Gov. Justice personal income tax cut
Bill’s future uncertain in state Senate
By STEVEN ALLEN ADAMS
For The Intelligencer
CHARLESTON – Gov. Jim Justice’s bill to cut West Virginia’s personal income tax rates by 10% across all income brackets received the nod of approval from the House of Delegates, sending the bill to the state Senate where its future is less certain.
photo by: Photo courtesy of WV Legislative Photography
The House passed House Bill 301, reducing the personal income tax, in a 78-7 vote with 15 members absent Thursday afternoon after voting down six amendments offered by the Democratic minority. Despite this, 11 members of the Democratic minority voted with the majority.
Even with no Republicans voting no, there were attempts by some Republicans to postpone action on the bill for one day and to send the bill to a second committee. Del. Daniel Linville, R-Cabell, said postponing action on the bill until today would give more time to negotiate a deal with Republicans in the state Senate. It would also give time for the Legislature’s Division of Regulatory and Fiscal Affairs to crunch some numbers.
“All I’m asking from each and every one of my colleagues is to just give us one more day and let the legislative fiscal affairs office continue to work,” Linville said.
Del. Jason Barrett, R-Berkeley, reminded the House that it passed a similar bill to HB 301 during the 2022 legislative session earlier this year. House Bill 4007 was also a 10% personal income tax cut, but the Senate refused to take it up.
“I support tax cuts, but I think it’s also very clear … that we’ve been down this road before,” Barrett said. “We’ve passed a very similar bill to it and it didn’t get taken up by the Senate. We are still in negotiations with the Senate to pass a bill that will provide tax cuts, tax relief to your constituents.”
House Finance Committee Vice Chairman Vernon Criss, R-Wood, said there was no need to wait another day to pass the bill. The special session began Monday when lawmakers were already into town for three-day interim meetings which ended Tuesday. Every additional day the Legislature remains in special session past Tuesday costs approximately $35,000 per day.
“I believe it is time to allow that legislative process continue to work, so let us proceed with these amendments, vote them up or down, then let us send a bill to the Senate,” Criss said. “We are here to do the work that we were brought in town to do so that we can go home.”
Earlier this week, state Senate President Craig Blair, R-Berkeley, said there was no support for the current version of HB 301 among Senate Republicans. Instead, Senate Republicans prefer to focus on getting voters to approve a constitutional amendment on the November ballot that would give lawmakers the authority to lower or eliminate certain tangible personal property taxes.
A plan was released this week showing how Senate Republicans will fund counties – who rely on property tax revenue – directly from tax collections in the general revenue fund plus use a formula to provide an additional minimum of $1 million to counties. Other parts of the Senate Republican plan include additional funds for public employee retirees and reductions of personal income tax rates if the consumer sales and use tax revenue increases during a fiscal year.
Another lawmaker – Del. Shannon Kimes, R-Wood – made a motion to send HB 301 to the House Government Organization Committee, accusing some House members of negotiation with the Senate in bad faith and claimed that HB 301 increases taxes, which it does not.
“The fact of the matter is I think we need a different team to go into these negotiations and try to get a deal done,” Kimes said. “The team that we’ve sent into the debate can only bring us alternatives that include tax increases when the Senate is fully prepared to pass tax cuts without tax increases.”
“There has been absolutely no discussion because legislative procedure doesn’t allow us to sit down and negotiate with the Senate on a House bill,” Criss responded. “We don’t do that. We pass our own bills.”
HB 301 would cut personal income tax rates across all six income brackets retroactive to Jan. 1, resulting in more money on paychecks and larger tax refunds at the end of the tax year in December.
Rate cuts range from a 1% cut for those making $10,000 or less per year, reducing the tax rate from 3% to 2%; to a half-percent cut for those making between $40,000 and $60,000 per year and those earning more than $60,000 per year.
Those earning between $25,000 and $40,000 would see rates decrease from 4.5% to 4.2%. Those earning between $10,000 and $25,000 would see rates decrease from 4% to 3.7%. If the lawmakers approve, it will be the first change to personal income tax rates since 1987.
Four amendments offered by the Democratic minority were rejected, including an amendment to only offer a 5% personal income tax cut for fiscal year 2021 and an amendment that would offer all taxpayers a $250 rebate on fiscal year 2020 personal income taxes.
“The problem with the bill that we have that the Governor presented to us is it’s so unfair,” said Del. Larry Rowe, D-Kanawha. “This (amendment) puts money in the place where it is needed the most, and that’s with our regular West Virginians.”
In a statement released Thursday afternoon, Justice thanked the House for passing HB 301 and encouraged the Senate to support it as well. He accused the Senate of promoting a tangible personal property tax repeal that would benefit large businesses over average West Virginians.
“This is a good deal for all West Virginians,” Justice said. “This tax cut will come as an immediate relief to families who are paying the price for rampant inflation across the country while also setting us up to bring generations of prosperity to West Virginia.
“At the end of the day, what the Senate is proposing is ‘Build the field and wish and hope they come.’ That’s not wise,” Justice continued. “Reducing the personal income tax has been proven time and time again in many other states as an economic and population driver beyond belief.”