Eric Douglas Published

House Of Delegates Passes Personal Income Tax Reduction, Heads To Senate

House of Delegates deliberates HB 301.

The West Virginia House of Delegates passed House Bill 301 Thursday. If it becomes law, the bill will reduce personal income taxes in the state by an aggregate of 10 percent.

For the average West Virginian, that amounts to about $240 a year. In total, though, the reduction cuts $254 million in revenue from the state budget.

The bill was originally proposed by Gov. Jim Justice and was the reason for calling the legislature into special session before the abortion question took center stage. Justice has promoted the bill as a way to encourage people to move to the Mountain State.

The bill now heads to the state Senate.

House Democrats tried several times to amend the bill, worrying that revenue reduction is fine in a fiscal year with large amounts of surplus revenue but questioned what would happen in a year when things weren’t so flush. Justice reported more than $1.3 billion in revenue surplus this year.

“I would just emphasize to us as a body that we’re going down a road for a permanent reduction in revenue, based on the grace of the federal government in giving us money that we didn’t have before,” Del. Larry Rowe, D-Kanawha, said. “The reality of this folks, and having been here a number of years, I can tell you the reality is, it’s not fun to raise taxes. It feels good to lower taxes. But if you go too far, you end up having a great deal of difficulty in trying to balance the budget that we have.”

In response, Del. Eric Householder, R-Berkeley, the House Finance chairman, said, “After seven decades of population decline, do you think we want to try something different and a different strategy? So I think keeping our young, high achievers and our entrepreneurs at home is a good place to start.”

Another concern was that West Virginia voters will consider a constitutional amendment this fall that will give the legislature the power to alter or remove personal property taxes – many of which are used to fund school systems.

Del. Daniel Linville, R-Cabell, made a motion to delay voting on the bill one day so the House could spend more time analyzing the numbers.

“We also know that we have a constitutional amendment that’s going to be before the voters,” Linville said. “We also know that we have a duty to act responsibly. And I believe in my heart that we can do both. I think we could do this plan. And we’re able to make meaningful reductions, or even total elimination of the people’s personal property equipment and inventory taxes if they choose to ratify that in the Constitution. But there’s concerns. We’ve been running the numbers over and over and over again, and we want to make sure we have as conservative an estimate as is possible that we can afford both.”

That amendment failed.

Ultimately, the bill passed along party lines with a vote of 78 to 7 with 15 absent.