MORGANTOWN – Gov. Jim Justice took his “food fight” – as he’s been calling it – with the Senate over Amendment 2 to another level on Thursday.
Speaking from Independence Hall in Wheeling, he elevated his traveling community conversations on the issue to a statewide address; although it was essentially just another one of his conversations, minus Babydog, and not really a speech.
Revenue Secretary Dave Hardy opened the meeting, as the governor arrived 38 minutes late, apparently delayed by fog, as Hardy related.
Quick background: If voters approve a change to the state Constitution through Amendment 2, it would enable the Legislature to change the tax code to eliminate the property tax on business inventory, equipment and machinery, and on motor vehicles. This is the plan of Senate leadership. Justice and House leaders favor a plan to phase out the personal income tax, initially by an aggregate 10%.
Hardy said nine states have no personal income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.
Those states, he said, have seen their populations grow two times faster than the other 41 in the last 10 years. They’ve also seen their economies grow 56% faster.
Eliminating West Virginia’s he said, would be a boon, especially with our aim to attract teleworkers. “Telework is the future.” Teleworkers want to move somewhere with low crime,, great quality of life, good schools and low taxes.
Independence Hall was the seat of the Restored Government of Virginia and the site of the first West Virginia Constitutional Convention and the first and second Wheeling Conventions.
Hardy said that when West Virginia broke away from Virginia, the framers of the Constitution deliberately chose to depart from Virginia’s law and keep property taxes in the hands of the counties. They wanted property taxes to remain where they came from and not be politicized.
Justice then took to his stool and recounted his property tax proposal – a way to use about $254 million of last fiscal year’s $1.308 billion budget surplus and give it back to the residents. It’s supported by the House but the Senate killed it during the July special session.
“The deeper that I dug the more this stinks,” he said. The Senate plan to use budget surpluses to make whole the money the counties would lose from their tax plan was the result of deceitful lobbyists peddling influence to benefit big corporations, with the added carrot of tying the vehicle tax to it.
“At the end of the day your county loses all control,” he said. Every year, they would have to go before the Legislature to beg for their share.
But surpluses won’t last he said. A five-year PEIA financial outlook projects it could be $376.5 million under water by 2027. When times are tough, counties will suffer, or residents will see their property taxes climb.
He again talked about the bill he will introduce in January, in place of the Senate’s plan, to provide a vehicle tax rebate retroactive to this year. He said residents who pay their taxes online will see the money almost immediately returned to their bank accounts. That makes the dangerous Amendment 2 unnecessary and paves the way for his income tax plan, without changing the Constitution.
People will spend that rebated money, he said, helping the economy. Then they can look at giving small businesses a tax incentive break, and maybe later look at how to whittle the inventory and machinery tax down.
Senate President Craig Blair didn’t respond to Justice’s Thursday address, but has been issuing regular releases for the Senate plan and against Justice’s.
In a recent release he said Justice’s vehicle tax bill is confusing, requires additional taxpayer paperwork, isn’t really a rebate but a delayed offset, is subject to federal income taxes, and more.
“It’s offensive to me the number of hoops he wants our residents to jump through to receive the exact same thing that could be accomplished by simply voting for Amendment 2,” Blair said. “He’s trying to say that he wants to keep control out of Charleston? There’s not much more Charleston than sending in a bunch of forms to the State Tax Department and waiting to get your money back.”
He continued, “It’s right there in the Amendment: Personal property tax on vehicles can be exempted from taxation,” Blair said. “It does what it says in a straightforward, simple way. If you want to stop paying that annual 13th car payment, it’s a yes on Amendment 2.”
House Speaker Roger Hanshaw has supported Amendment 2 because it would enable the Legislature to take future action, but has not supported the Senate plan to use surplus funds to make counties whole.
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