By Matthew Young, RealWV
CHARLESTON, W.Va. – The Senate convened for a second time on Wednesday to adopt their version of a personal income tax (PIT) reduction plan (SB 424), making it the third such plan to be proposed during the current legislative session. However, unlike the plan adopted by the House of Delegates, the Senate’s plan differs greatly from what Gov. Jim Justice proposed during last month’s State of the State address.
To expedite the Senate’s proposal, and in similar fashion to the way in which they passed 23 bills on Jan. 11, constitutional rules requiring that all proposed legislation be read on three different days were suspended. Only Sen. Mike Caputo, D-Marion – as he did on Jan. 11 – voted against the rule-suspension. However as with every other member present, Caputo voted in favor of the bill.
Sponsored by Senate President Craig Blair, R-Berkeley, if enacted, SB 424 would provide an immediate 15% reduction in PIT. While this is a significantly smaller PIT reduction than those offered in the plans favored by both Justice, and the House of Delegates, Blair’s plan also includes rebates on various property taxes for both individuals, as well as small businesses.
“This is a significant tax reduction for the people of West Virginia,” Sen. Eric Tarr, R-Putnam, said, while speaking in favor of the bill. “It’s going to total (cost the state) around $600 million for every year going forward.”
According to Tarr, the $600 million includes the all-tax-bracket 15% PIT reduction, the elimination of the “marriage penalty,” a homestead rebate for eligible service-disabled military veterans, and the aforementioned various property tax rebates. In addition, Tarr added, for any fiscal year in which state sales tax revenue reaches 105% of the previous year, PIT will incur a supplemental reduction.
“I too rise in support of this legislation,” Sen. Minority Leader Mike Woelfel, D-Cabell said. “I believe that the House of Delegates’ version (HB 2526) of the tax plan relies on unfounded financial assumptions of the future.”
“West Virginia has been showered with one-time federal CARES Act money and ARPA money,” Woelfel continued. “The influx of these millions provides the mere illusion of prosperity in our future. I fully support the Senate legislation.”
Del. Todd Longanacre, R-Greenbrier, does not agree with Woelfel’s assessment.
“While I certainly do not speak for the full House, I do believe the House plan is much better and more thought out,” Longanacre told RealWV after the passage of SB 424. “The Senate plan ignores the will of the voters in that they said no to a property tax repeal last November. (Amendment 2 ballot initiative). Nevertheless, I will support any kind of tax reduction reform I can vote for at this point.”
“It’s been three years in the making,” Longanacre continued. “I just wish the Executive Branch and the Senate would dispense with their personality conflicts, swallow their pride, and get on the same page. If not, I fear a repeat of the 2021 session during which nobody got anything.”
While also speaking with RealWV, Sen. Jack David Woodrum, R-Summers – who serves on the Senate’s Finance Committee – was more diplomatic in his support of SB 424 than Woelfel, saying, “It’s a very fiscally responsible plan – it’s a conservative plan.”
“It (SB 424) provides tax relief, not only for the middle class that pay PIT, but it also provides for lower wage earners and retirees who pay much lower income tax,” Woodrum noted. “There is additional relief in the form of tax credits on automobiles. And it provides much needed relief to small businesses in West Virginia.”
With separate PIT reduction proposals having now been adopted by each House of the Legislature, it is unclear what the path forward will look like. RealWV will provide updates regarding the status of both HB 2526 and SB 424 as additional information becomes available.