Justice Reaches Out To House On Tax Cut Proposal

Gov. Jim Justice, seen here at the 2022 State of the State Address, reached out to House Speaker Roger Hanshaw, R-Clay, over the weekend to seek support for his tax cut plan.
CHARLESTON — Once on opposite sides two years ago on the best way to phase out the personal income tax, now it appears that Gov. Jim Justice and the Republican leadership in the West Virginia House of Delegates might be on the same side on a personal income tax cut.
Speaking during a virtual briefing with reporters Tuesday morning from the State Capitol Building, Justice said he spoke with House Speaker Roger Hanshaw, R-Clay, over the weekend regarding a plan to cut the personal income tax rates by 10% aggregate across all tax brackets.
A spokesperson for the House of Delegates confirmed the meeting took place.
“I guess it was probably Saturday when I had an hour-and-a-half meeting with the Speaker of the House; a very productive meeting,” Justice said. “I appreciate being able to spend the time with Speaker Hanshaw, but we’ve had several conversations back and forth with different people from the Senate side and the House side.”
Justice said last week he would call a special session to consider his tax plan coinciding with July legislative interim meetings already scheduled in two weeks beginning on Sunday, July 24, through Tuesday, July 26.
The tax cut proposal would cost $254 million and be retroactive to Jan. 1.
Justice’s personal income tax cut proposal mirrors closely House Bill 4007, sponsored by House Finance Committee Chairman Eric Householder, R-Berkeley, though Justice has said his specific cuts to tax bracket will be different. HB 4007 passed the House 76-20 along party lines but was never taken up by the state Senate during the 2022 legislative session.
“It’s very similar to Chairman Householder’s bill and everything from the standpoint of the philosophy,” Justice said.
“Six months ago we didn’t have all the intel that we got from the last six months and all the good stuff that has happened … irregardless, Chairman Householder and I think the same, and that is the attraction of the elimination or reduction of the personal income tax in West Virginia would be a tremendous thing for the state of West Virginia.”
It was only about 16 months ago when Justice and House Republicans were at loggerheads over a proposed phase-out of the personal income tax that accounted for 42.5% of West Virginia’s general revenue fund tax collections in the fiscal year that ended June 30.
Justice and Senate Republicans came to an agreement on a plan that would have phased out the personal income tax by 50% starting in January, with reductions going forward.
Republicans in the House chose to support the Householder plan in House Bill 3300 that would have phased out the personal income tax by $150 million every year until the tax is gone.
The state Senate decided to amend its version of the personal income tax phase-out into the House bill. When the bill came back to the House, Hanshaw and House leadership were determining what their next move would be when Justice accused them of sitting on the bill. The House responded by unanimously voting against a motion to concur with the Senate’s changes to HB 3300. All 100 members, 78 Republicans and 22 Democrats, voted red for no.
Now, it is Senate Republicans that might nix the Governor’s plan for a personal income tax cut. In an interview Friday, Senate President Craig Blair, R-Berkeley, said he would rather see taxpayers receive a $150 million rebate on their motor vehicle personal property taxes as a way to encourage them to support Amendment 2, a constitutional amendment on the November ballot that would give lawmakers the authority to reduce or eliminate certain personal property taxes, including motor vehicles.
Justice opposes the rebate idea or eliminating the proposed personal property tax categories, which help fund county government and county boards of education. Justice believes his income tax cut is the quickest way to provide immediate tax relief to West Virginians.
“I really believe the elimination of the income tax has the most sex appeal of anything, period,” Justice said. “My plan will get money right into people’s hands right now.”