Income tax cut passes West Virginia House, heads to Senate
CHARLESTON, W.Va. (AP) — The West Virginia House of Delegates on Thursday passed the Republican governor’s plan to reduce the state income tax by 10%, setting up a clash in the Senate, whose president is cold to the idea.
The GOP-controlled House supported the bill on a 78-7 vote with 15 delegates absent. The vote came without debate after several amendments offered by Democrats were rejected, including one that would have given taxpayers a $250 rebate instead of the tax cut.
The bill now goes to the Senate, where President Craig Blair prefers cuts in the state personal property and business and inventory taxes. A constitutional amendment before voters in November would allow lawmakers to adjust those taxes. Blair has said an income tax reduction alone would not aid the state economy or attract businesses and new residents.
The income tax reduction was part of Gov. Jim Justice’s special session announcement last week. The state of West Virginia ended the last fiscal year with a record $1.3 billion surplus. A 10% reduction is the maximum cut allowed while remaining in compliance with funding stipulations in the American Rescue Plan Act, Justice said.
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He said West Virginians at every income level would see their taxes drop under his plan, which would be retroactive to Jan. 1 and would put $254 million back into residents’ pockets when they file their 2022 taxes.
In a statement Thursday afternoon, Justice said the Senate’s personal property tax plan would favor larger companies and would put control of county budgets in legislators’ hands “with no guarantee that the money will continue to flow if West Virginia sees an economic decline.
“Do we really want to play a game of chance when it comes to our schools and our police, fire, and EMS services? It’s a big spend with big risks.”
The governor’s pitch is the third attempt to cut personal state income taxes in the past year.
The West Virginia Center on Budget and Policy said the latest proposal would be ineffective when it comes to helping families and working people because it would largely benefit the wealthy.
More effective ways of using the revenue surplus, the nonprofit said, include investing in the state’s public employee insurance program, providing subsidized care to an additional 10,000 children, enacting a paid family and medical leave program for all workers, investing in workforce development, and giving all families a one-time $250 tax credit for each child.
As lawmakers started meeting Monday in special session, Justice abruptly added an abortion bill to the agenda. The session began a week after a Charleston judge barred West Virginia from enforcing an 1800s-era abortion ban, ruling it unenforceable and superseded by a slew of conflicting modern laws. Justice then called lawmakers to “clarify and modernize” the state abortion laws.
The bill on abortion, which passed the House on Wednesday, would make providing the procedure a felony punishable by up to 10 years in prison and includes exceptions for victims of rape and incest along with medical emergencies. That bill is before the Senate on third reading Friday.