The Senate Finance Committee advanced a pay raise bill for public employees, but with a twist.
The Senate’s version of the bill would tie an average 4% raise for public employees to whatever happens with an upcoming trigger on personal income tax cuts.
If the trigger based on economic indicators activates another personal income tax cut, then there will be no raise.
If there is no triggered personal income tax cut, then there would be a raise.
Got it?
If you are trying to figure out if you might be in line for a raise, here is how the trigger works:
The trigger to cut personal income taxes again would measure general revenue collections in a fiscal year minus severance collections compared to 2019 as a base year, adjusted for inflation. If collections are ahead of the base year, that would activate the trigger.
This could all be decided from August into next fall, when the state assesses whether the trigger has been hit. If pay raises are activated, then they would be retroactive to July 1.
The Senate Finance Committee earlier this week tied a break on state taxes on Social Security to the trigger too. If the state does not hit the trigger, West Virginians who pay taxes on Social Security benefits would get a break. If the state does hit the trigger, there would be a broad tax cut on personal income taxes — but not a specific tax break for Social Security beneficiaries.
Following the Wednesday afternoon Finance Committee meeting, chairman Eric Tarr said he favors those formats because of current uncertainty surrounding state finances.
“The pay raise we just passed out of here will cost about $99 million, but we don’t know exactly what’s available to use on it until that trigger hits, so we don’t have to appropriate it right now in this fiscal year until August once we see the trigger hit,” Tarr said. “So what we do is, we come back in and fund that and it’s all paid.”
He said, “It gives us options of how you give money back to people, whether it’s the tax cut or the pay raise.”
Senator Mike Maroney, R-Monongalia, expressed reservations during the meeting over the if-this-then-that structure of the pay raise.
“I favor the pay raise,” he said, “and am concerned that many of the employees in my district could come away with a $200 tax cut if the trigger hits as opposed to a $2,400 pay raise.”
