Speaking during his end-of-the-week COVID-19 briefing at the Capitol on Friday afternoon, Justice said it was time for the West Virginia Senate to support his 10% personal income tax plan with tax revenues exceeding estimates for the second month of the new fiscal year.

“I don’t know why in the world the Senate won’t act,” Justice said. “We’ve got the surpluses. We have the mechanisms in place to be able to get real dollars right back in the pockets of hardworking West Virginians right now.”

According to data from the state Department of Revenue and the Senate Finance Committee, collections for the general revenue fund for August were $507 million, exceeding the $365.2 million revenue estimate by 32%, giving the state $141.8 million in tax surplus revenue for the month. That’s on top of the $92.4 million surplus for July, the first month of the new fiscal year 2023.

“Our revenue numbers are continuing to be great,” Justice said. “I could not possibly be more proud, that’s all there is to it. We have done exactly what you employed me to do, and that was mind the store and get our state right-side up. I promised you a rocket ship ride and you’re on it. Absolutely our state continues to do terrific.”

West Virginia ended fiscal year 2022, ending in June, with $1.3 billion in surplus tax revenue and leaving the state with approximately $515 million in excess revenue after appropriations for items placed in the back of the new general revenue budget approved by lawmakers in March. State tax officials credit the surplus tax revenue to maintaining a flat budget, natural economic growth, and a booming fossil fuel economy.

Justice and legislative leaders see these record-breaking surplus tax revenues as an opportunity to give tax relief back to West Virginians, but agreement on the best approach to take remains elusive and sometimes abrasive.

The West Virginia Legislature remains in a paused special session due to disagreements over House Bill 302, a bill to create a modernized ban on abortion with limited exceptions. During that five-day special session at the end of July, the Senate rebuffed Justice’s House Bill 301, creating a 10% personal income tax cut spread out among all six tax brackets. The bill would return $250 million to taxpayers if passed.

“From the standpoint of our House of Delegates, they are right there with me,” Justice said. “I do not know why in the world we keep sitting on our hands while people are hurting and struggling with inflation like crazy, whether it be gas prices or food prices or whatever it may be.”

In a press release Thursday evening, Justice called on the Senate to pass HB 301 once the special session resumes and encouraged the public to contact their state senators to put pressure on them to pass the bill. Justice doubled down on his call to pass HB 301 Friday.

“We’ve got the surpluses and I ask you to absolutely reach out to our Senators who are great people and everything,” Justice said. “Reach out and tell them we’ve got to do this, and we’ve got to do this right now.”

Justice also spoke about a proposal by Senate Republicans as part of a plan if voters adopt Amendment 2 on the November ballot. Amendment 2 would give lawmakers the authority to reduce or eliminate six categories of tangible personal property taxes. Revenue from tangible personal property taxes go to county governments and county school systems.

If Amendment 2 is adopted, Senate Republicans want to eliminate tangible property taxes on machinery and equipment, furniture and fixtures, leasehold investments, computer equipment, inventory, and vehicles. The state would then fund all 55 counties at their actual county tax dollar assessments and provide counties with at least $1 million on top of their estimates to fund counties directly through the general revenue fund.

The Senate Republicans comprehensive plan is a bill that would allow for the reduction of personal income taxes contingent on increased consumer sales and use tax revenue. Sales tax revenue would need to increase by 5% in order to trigger an income tax rate reduction spread out among each tax bracket.

Another bill would offer West Virginia taxpayers a rebate on their tax year 2020 personal property taxes on motor vehicles. Another bill would provide a benefit increase to certain teacher and public employee retirees at a cost of $26.5 million as well as a $1,500 one-time payment for public employee retirees older than 70 as of July 1 with 20 years or more of employment with the state and who receive less than $1,000 per month.

Senate President Blair, R-Berkeley, and many other state lawmakers were at Justice’s Greenbrier Resort in White Sulphur Springs last Wednesday through Friday for the West Virginia Chamber of Commerce 86th Annual Meeting and Business Summit.

Speaking Friday morning, Blair said his opinion has not changed on the need to eliminate tangible personal property taxes before phasing out the personal income tax, though he is not opposed to taking action on both plans if feasible.

“Nothing’s changing,” Blair said. “If we can do both, we’ll do it. We’re trying to work out a strategy to be able to do that and not put ourselves at financial risk into the future. If we cannot figure that path forward, that is not going to happen. I have over 18 members of my caucus saying personal property tax first over the personal income tax.”

Blair took part in a panel discussing Amendment 2 earlier Friday morning at the business summit with West Virginia Chamber of Commerce President Steve Roberts, West Virginia Manufacturers Association President Rebecca McPhail, Bowles Rice attorney and former state tax official Michael Caryl, and House Speaker Roger Hanshaw, R-Clay.

“When it’s passed, and we believe it will pass, in November, then we’ve got to have a plan, because when it passes it comes with the expectations,” Blair told business summit attendees Friday. “There is a commitment to making it so that our counties, our municipalities, our school boards, everybody is going to succeed, and you share the wealth together.”

The House passed HB 301, the personal income tax bill, by a wide margin with bipartisan support. HB 301 is similar to a bill passed by the House during the regular legislative session. But Hanshaw said he was committed to seeing Amendment 2 approved by voters.

“If you actually have read Amendment 2 and not just read about it but actually read it, what you find is it costs not one red dime,” Hanshaw said. “It costs not a penny to anyone at any level of government. It costs not a dime because passage of the amendment does nothing but give the Legislature the power to start considering options on some tax reform.”

Justice has not officially offered his support or opposition to Amendment 2, but he has made it clear he does not support the Senate’s proposal for eliminating tangible personal property taxes. He believes doing so would provide only limited relief to individual taxpayers and benefit large business and out-of-state corporations.

“We’re absolutely bogging down on hundreds and hundreds of thousands of hardworking West Virginians because of the wishes of a very, very few. We’ve got to stop this,” Justice said. “At the end of the day, our job is to listen to the people and try to do the people’s work. These are not our dollars; they are the people’s dollars, so we really need to get this passed.”

Blair believes that Justice 10% personal income tax is too small to be of benefit to state taxpayers, preferring to eliminate tangible personal property taxes first then beginning a phase-out of personal income tax rates. Blair also pointed out the driver of the state’s tax revenue surpluses the last several months is the severance tax on coal and natural gas paid by companies, not personal income tax collections.

“The Governor is talking about giving the money back to the taxpayers. Our plan does that,” Blair said. “Those are just excess revenues. And by the way, they’re not coming from the people. They’re coming from the prices on fossil fuel. So, you should not look at that as something coming from the people.”