Here we are, the last week of the 2021 legislative period. Today is day 55 and the legislature is ready to go through the action until the hammer falls at midnight on Saturday, April 10th.
I feel a little redundant here, but once again all eyes are on House Bill 3300, the current vehicle to cut and phase out income tax.
Last week we talked about the House version of the personal income tax plan, which is very different from the plan put forward by Governor Jim Justice in House Bill 2027 and Senate Bill 600. Both bills are essentially dead, though someone could always change the provisions in HB 3300, which will be under amendment in the Senate today.
In this reconnected Goldilocks story, Justice believes the House's tax reform version is too cold, the Senate's version of HB 3300 too hot, and of course he thinks his version of the personal income tax plan is correct.
I spoke to the governor last week and he firmly believes his plan is the right way to go: the one that he believes will have money in his pocket even after the various sales tax and excise tax hikes that have a discount for Offers people who earn less than $ 35,000 a year and one who tells the world that West Virginia is serious about creating a better tax environment.
But even here he has sold his plan to the wrong amount up to this point. It's not to say that he didn't speak to lawmakers, but I also suspect that he was in coach mode rather than politician mode. Justice loves to say he's not a politician and boy is doing this show.
Now the judiciary is holding a summit at noon tonight to work out a deal between him, the House and the Senate. The question is, will anyone show up? Justice announced the summit on the MetroNews Talkline on Friday and later during his COVID-19 briefing. The problem is that he hadn't told anything to the House and Senate leaders who learned about the summit when they tried to hold their floor sessions on Friday.
I didn't get the impression, speaking to my sources in the House and Senate, that lawmakers were enjoying a midday summit when they were also trying to get the rest of the legislation out the door by Saturday. It would almost make more sense to have the Senate pass its version of HB 3300 on Tuesday and have it passed on to a conference committee where the governor or his representatives can participate in the negotiations.
Not to say that getting everyone in one room to work out a compromise is a bad idea. It's actually an idea that I specifically asked the governor about last week. I also had a similar email conversation with former Senate President Bill Cole. It seems like everyone is on board the core mission of reform and income tax exit, but all sides have returned to their different nooks and crannies. Everyone has to give a little – the governor, lawmaker, business community, etc – to get a bill in time for the session to end.
The Senate plan is meant to be a mix of the Governor's and the House's personal income tax plans in many ways. In many ways, however, with its tax increases, it is much more extreme to offset the loss of revenue with reduced income tax rates.
The Senate plan would cut income tax rates by more than 50 percent, even for small businesses and sole proprietorships, but not for investment income. The plan would cut income tax revenues by $ 1.09 billion.
To pay for the personal income tax cut, the Senate version of HB 3300 would increase consumer sales and consumption tax from 6 percent to 8.5 percent. It would also remove sales tax exemptions for services commonly used by businesses and tax some at lower rates.
Further tax increases in the Senate version include the reintroduction of the food tax of 2.5 percent, the taxation of ready meals of 8.5 percent, a tax of 4.3 percent on short-term accommodation, a tax of 8, 5 percent on legal regulations on contingent liabilities and the creation of a new lottery scratch-off game.
The judiciary made it clear to me that it would not support the Senate plan, especially since it does not offer a discount for those on less than $ 35,000 and includes the reimbursement of the infamous grocery tax on groceries.
Last week I posited that there could be a special session on tax reform if a deal doesn't get through by the end of the session. Because of my discussions with the judiciary, I'm not so sure now. The governor believes that the time is now and the longer it takes, the more the state is missing out on the opportunity. If a deal can't be reached, so be it.
But I've seen crazier things happen during one legislative session. Perhaps a deal can be worked out in the last few days and even the last few hours. The future remains unwritten.
(Adams is the state government reporter for Ogden Newspapers. He can be contacted at [email protected].)
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