There’s no bill to examine yet, but Gov. Jim Justice plans another town hall meeting to pitch his income tax cut proposal to West Virginia residents.
The town hall — Justice’s third — will be at noon Tuesday. Citizens may submit questions in advance, and the governor says he’ll answer them for a little more than an hour.
Gov. Jim Justice
Justice said it’s “our effort to try in every way we possibly can to better educate the public about the implications and the impact of what could be the absolute opportunity where there’s none ever been — that even approaches what an opportunity this will be in the State of West Virginia.”
The last time Justice had a town hall event, last Wednesday, he indicated a bill reflecting his income tax proposal could be presented in short order. “Probably tomorrow, I’ll have it to the Legislature,” Justice said then.
But there’s still no bill.
Today is legislative Day 20, a third of the way through the 60-day regular session.
Justice started talking about the income tax cut the day after the General Election. It was the big idea at the center of his State of the State address in early February.
The income tax brings in about $2.1 billion a year to state government and represents about 43 percent of the state’s general fund, paying for services like education and healthcare.
Justice proposes cutting the income tax in half next Jan. 1. He has described making up the difference through other changes to the state’s tax structure such as a tiered severance tax system for energy sectors, increased sales taxes, an excise tax on “luxury” goods, expanded taxes for professional services such as legal representation or accounting and more.
The governor foresees being able to eliminate the rest of the income tax on the strength of population growth.
No one has seen the details though.
Roger Hanshaw
Speaking today on MetroNews’ “Talkline,” House Speaker Roger Hanshaw said he supports the concept of an income tax cut but would like to see a bill.
“I’m for almost anything that might have the possibility of putting us on a positive population trajectory,” said Hanshaw, R-Clay.
“In terms of where’s the bill, we talk every week with the governor’s office. It’s my understanding the governor is just polishing up the plan that he wants us to consider. We have looked at plans in both the House and the Senate independently as well as some options for a collective plan here. But we really want to follow the governor’s lead on this.”
Hanshaw concluded, “We don’t want to get out ahead of the governor on this one. We want to follow his lead. We’re just still waiting for the bill too.”
Lisa Zukoff
Democrats, speaking today at a briefing with reporters, said it’s hard to judge the governor’s proposal without seeing it.
“I’d say it’s going to be rushed because we haven’t seen one number, one statistic. We haven’t seen an outline of how the proposal is going to back fill West Virginia’s budget,” said Delegate Lisa Zukoff, D-Marshall. “So it’s really hard when this is such a huge issue in West Virginia.”
She added, “We’re a third of the way through the session. That’s a huge bill to take up without having any information at this point.”
During the last town hall session, state Revenue Secretary Dave Hardy described an income tax cut of about a billion dollars next Jan. 1.
Hardy described some tax hikes to make up for the big tax cut:
— The consumer sales tax right now is 6 percent. A possible increase would be from 7.5 to 7.9 percent. That doesn’t reflect the additional 1 percent that some municipalities add on.
— Hardy described a possibility to “expand our consumer sales tax base.” “In other words there are certain services that have not been taxed in the past that might be taxed in the future to grow the base of the consumer sales tax. Those might include legal services, accounting and advertising.
A caller at one point asked Justice if those additional taxes on services wouldn’t just be passed along to consumers. Against the conclusions of many experts, Justice said there would be no pass along. He said that’s because the lawyers and accountants would feel pressure to compete.
— Hardy expanded on Justice’s proposal for a luxury tax on purchases over $5,000. “It starts as low as 3 percent, and as it moves up the ladder there it goes it goes from 3 percent all the way down to 1.5 percent,” Hardy said, depending on the cost of the item. “We’re not talking about houses. We’re not talking about automobiles. We’re talking about luxury items such as jewelry and things of that nature.”
— A tiered severance tax system could be imposed for coal, oil and natural gas. When markets are good, companies in those sectors would pay more. When times are tough, they would pay less. “We’ve asked them to consider and agree that it would be in the best interest of our state if we tier those severance taxes,” Hardy said. “As they make more money they’re asked to pay a little bit more.”
— A cigarette tax could go up from the current $1.30, but Hardy said the exact amount has not been pinpointed “and that’s something the governor will be talking to the Legislature about.” Other tobacco products also have increased taxes. “Another product that is very controversial is e-cigarettes. There’s discussion about whether we would raise that tax as well.”
— Hardy said the current soda pop tax of a penny per 16.9 ounce container could go up. The conservative Cardinal Institute think tank, which is in favor of the income tax cut overall, came out against the pop tax increase last week, calling it regressive.
“So there’s a lot of moving parts in this idea, but the idea is very simple: Cut the state income tax by 50 percent and then go out across all aspects of West Virginia’s economy, the business community, consumer sales tax, the luxury tax, soft drinks, cigarettes, perhaps alcohol as well,” Hardy said.
That would be combined with possible state budget cuts of about $25 million — not yet specified — along with some goals of reducing the state workforce by attrition.
“I have said all along how I feel like getting rid of our personal income tax would be a step forward like you can’t imagine,” Justice said today.