Gov. Jim Justice pitched his proposal for an income tax cut during his State of the State speech, and the House Finance Committee got it moving the very next day.
A majority of House Finance Committee members voted to advance the tax proposal bill Thursday evening. The bill now goes to the full House, where support seems solid. Delegates have passed similar versions of the same concept in prior years.
“The governor announced last night that he was wanting to go big,” said House Finance Chair Vernon Criss, R-Wood. “There was no reason not to move ahead.”
By next week, he suggested, the bill could be the first delegates pass on to the Senate.
The personal income tax reduction is structured as 30% the first year, then 10% each of the following two years. The same percentage reductions would be applied to all the current tax brackets.
A fiscal note assessing the bill concludes it would decrease General Revenue Fund collections by about $161.8 million in fiscal 2023, $1,084.5 million in fiscal 2024, $1,229.6 million in fiscal 2025, and $1,492.6 million in fiscal 2026.
Revenue Secretary Dave Hardy said the projections and fiscal note assume a mild recession and an energy market downturn. He said it does not make any assumption about the effects of economic stimulus, but that’s the aim.
“We very much think there will be because we’re returning literally $1 billion,” Hardy told the committee. “We all know those dollars will be spent to some level.”
Delegate Daniel Linville, R-Cabell, has vocally supported the tax cut and said passing it quickly sends the message that it is a priority.
“We’ve made it a priority in the House to do tax cuts for years and years,” Linville said after Thursday’s meeting. “We knew what we were able to do before we ever walked in the door, and the numbers have continued to be better and better and better.
He concluded, “If we can come together as the House, the Senate and the Governor’s Office, the people of the state of West Virginia are going to get the most massive tax relief they’ve ever dreamed of.”
Delegate Larry Rowe, D-Kanawha, expressed concern about the percentage of the cuts, saying lower income earners would interpret the policy by sheer dollar amounts. Many would wonder why they would be subject to the same percentage change as much wealthier counterparts, he said.
Rowe, one of few Democrats on the committee, offered two amendments that he said would address that, but they were voted down.
“We’re talking about percentages,” Rowe said. What people talk about back home on the kitchen table are dollars.”
