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Government

W.Va. House Kills Personal Income Tax Reduction After Prodding From Gov. Justice

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Perry Bennett
/
West Virginia Legislative Photography

Updated Friday, April 9, 2021 at 5:05 p.m.

The West Virginia House of Delegates swiftly and overwhelmingly killed a proposal that would have reduced personal income taxes but called for hikes on other revenue streams.

The House took action to reject the bill after Gov. Jim Justice expressed his disappointment over the lower chamber’s inaction on the issue that failed to garner legislative consensus.

After holding out on receiving the message on the measure’s Wednesday passage in the Senate, the House voted Friday afternoon to unanimously reject House Bill 3300. Republican leaders took up the bill that had passed the Senate late Wednesday.

The latest plan from the Senate became the focus after the governor held a Monday meeting with top lawmakers in an attempt to gain consensus on the issue. The upper chamber based its proposal, at least in part, on an updated set of ideas from Justice.

The Senate’s final version would have reduced the personal income tax and would have offered tax rebates to low-income earners — but would have done so through increases to the consumer sales tax, a tiered system on severance taxes and hikes to the cigarette tax.

An earlier plan passed by the House differed dramatically from the Senate’s version and offered no new sources of revenue to balance the state budget. House Finance Chair Eric Householder, R-Berkeley, said the Senate’s tax increases and new revenue streams were the deciding factors for the lower chamber.

“We showed them the easy way out,” Householder said. “West Virginians want real tax relief and no new taxes. So why in the world do we want to penalize our small businesses, as they are the lifeblood of our economy? And why do we want to place new burdens on our own citizens?”

Del. Marty Gearheart, R-Mercer, also chimed in and called on fellow lawmakers to reject the Senate’s proposal.

“To quote our governor, ‘There is no way shape, form or fashion’ that I can ever support any portion of what is suggested,” Gerheart said. “Ladies and gentlemen, it is time for us to let the governor and the Senate know that we recognize that tax increases are not a tax cut. They are simply a shifting of burden.”

Hours earlier during a virtual news briefing, Justice suggested delegates take a vote on the proposal the governor had backed emphatically throughout the course of the 2021 session.

“They're not gonna vote on it, because they're afraid to vote on it. Because certain people go on record as saying that they aren't even going to vote on the most important thing that this state has ever, ever had in front of it,” Justice said.

The governor and members of the Republican-led Senate had promoted the reduction of the personal income tax as a means to not only stave off the state’s population decline, but also attract hundreds of thousands of new residents — especially in light of the state’s newfound attention for its pandemic response.

“West Virginia is a great place to work remotely. We are investing in broadband and roads right today. We have led the nation in our COVID response,” Justice said. “People are realizing West Virginia is a safe, beautiful place to live. Now's our moment.”

Following the House’s rejection of the measure, House Speaker Roger Hanshaw, R-Clay, told reporters he and his members aren’t opposed to reducing the personal income tax. But, Hanshaw said, it would have been “reckless” to vote for the Senate’s plan.

“We were never going to get this done in 60 days. We didn’t get a plan until well into the regular session — and there is nothing wrong with that,” Hanshaw said. “But big, transformative, monumental policy changes take time to craft.”

During Justice’s news conference, he suggested that he would continue to tout the idea through a “roadshow” in which he would educate residents on the issue.

The West Virginia Legislature’s 60-day regular session ends Saturday at midnight.


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