The House of Delegates Finance Committee advanced a $4.6 billion budget Wednesday, but it doesn’t account for upcoming changes to PEIA nor a compromise on tax cuts. Earlier in the week, Senate passed a compromise tax cut plan (SB 424), as well as a budget proposal (SB 150) that accounts for proposed changes the House budget does not.
As the Senate bills are more comprehensive, we will focus on them instead. That said, the SB 424 and SB 150 are likely to change before the end of the regular session — and we hope they do, because the math isn’t quite adding up.
The Senate’s tax cut bill is largely as we’ve discussed previously: 50% credit on business property taxes, 100% refund on vehicle taxes and 100% credit on real property taxes for disabled veterans. The personal income tax cut, however, has changed. At roughly 21% less than current rates, it’s more than the Senate had previously proposed, but less than the 50% reduction the House and Gov. Jim Justice want (and which the House budget reflects). The rates would decrease from 3% to 2.55%; 3.5% to 3.4%; 4.5% to 3.825%; 6% to 5.1%; and 6.5% to 5.525%, with additional 10% decreases triggered by certain revenue thresholds. Keep all this in mind as we pivot to the budget.
According to reporting by Brad McElhinny, the Senate’s budget totals approximately $4.4 billion, and senators made sure there was $484 million left to cover tax cuts. This is less than the “relatively flat” budget of $4.884 billion Justice requested.
Here’s where the math starts to get a little wonky. The fiscal note for the latest version of SB 424, the tax cut bill, puts the cost between $475 million (using a mix of estimates for fiscal years 2024 and 2025) and $741 million (for FY 2025). The governor’s office estimates the Senate’s current plan will “save” West Virginians $750 million. And, of course, the Senate says it left $484 million in the budget for its proposed cuts.
It sounds like the number-crunchers down in Charleston need to get their stories straight. We might be talking about theoretical expenses at the moment, but we’ll be applying that theory to very real taxpayer dollars and very real government services, and every cent will have to be accounted for.
Which leads us back to the other thing the Senate has proposed doing with our tax dollars — or, rather, not doing. That $484 million cut from the budget to accommodate tax credits? It’s getting shaved off of Medicaid and social services, at $264 million and $220 million respectively.
Lest our legislators forget, “social services” encompasses many of the systems and programs they recently criticized as broken and swore to fix — like foster care, mental health, addiction and recovery and child and adult protective services, among others. We should also mention that foster kids receive their health insurance through Medicaid, as do many of West Virginia’s seniors and poorest families. The Senate’s plan sells out children and seniors so it can save the middle-class a couple hundred bucks a year while businesses and the wealthy pocket several thousand to several million.
There’s something awfully wrong with that math.
