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Justice Renews Call For Special Session To Cut Personal Income Tax Further

The timeline for the session will be mid to late August, but Justice conceded it could be pushed back a little further.

For weeks, Gov. Jim Justice has indicated his desire for the legislature to return for its second special session of the year in order to implement further cuts to the state’s personal income tax.

Justice signed a law in 2023 that slashed income tax by more than 20 percent. The law also provided a mechanism for additional tax cuts once the state revenue surpassed its total from 2019, which has already resulted in a 4 percent cut this year.

“The bottom line to this state is there is nothing that will drive population to this state any greater than cutting the personal income tax,” Justice said. “It’s the people’s money. For crying out loud on top of that, we’ve got $826.6 million in surplus now but in addition to that we’ve got $400 (million) plus interest money in the reserve fund for the personal income tax that’s sitting there on top of that, and a billion plus dollars in a rainy day fund.”

He touted a state map from the Tax Foundation that showed West Virginia ranked 19th in the nation for inbound population migration. The Tax Foundation is an international research think tank based in Washington, D.C., that collects data and publishes research studies on U.S. tax policies.

Justice stated that the states on the map with the highest population growth don’t have a state income tax or are on the way to getting rid of their state income tax. He said that was part of his motivation to ask the legislature for a further five percent cut to the state’s personal income tax on top of the four percent triggered earlier this year.

“There’s no driver on the planet that’s gonna be better than that,” Justice said. “I hope that you will ring and absolutely urge them to pass that dollar that those monies on to you when we call him back into session.”

The timeline for the session will be mid to late August, but Justice conceded it could be pushed back a little further.

When asked if any other issues would be included in the special session call at his regular press briefing Thursday, the governor reiterated that beyond seeing former President Donald Trump elected in November, cutting the personal income tax is his top priority.

Appearance At RNC

The governor started the briefing by going over his presentation at the Republican National Convention Tuesday night. He said he crafted his speech not as a political statement but rather in order to talk about what he called “the bottom line to the whole everything that’s going on in this country.”

“The bottom line to one thing is exactly what I’ve said so many times: If we continue on the pathway for four more years that we’re on right now, I don’t know what’s gonna happen to this country,” Justice said. “Therefore, I think we’ve got to elect Donald Trump hands down. That’s the bottom line.”

Justice repeated his belief that “we become completely unhinged as a nation if Donald Trump doesn’t win,” a statement that has drawn criticism from those that perceive it as a possible call to violence.

Babydog’s Painting

Justice was joined on the RNC stage by Babydog, to the delight of the national audience. On Thursday he was asked about a possible lawsuit for misappropriation of state funds after the image of an English bulldog was included in recently revealed historic murals in the Capitol rotunda.

He replied by saying he would not comment on pending litigation, but that he was not consulted on the choice.

“From what I understand the artist said he felt like a dog ought to be in the thing,” Justice said. “And then folks said, ‘Well, look, I don’t know how in the world we can have anything better than maybe one of Babydog’s descendants’ and everything. So that’s how it came into being. I mean, give me a break.”

Watch the full briefing here:

Income Taxes Cut 4 Percent, Justice Planning Special Session For Further Cuts

Gov. Jim Justice said Wednesday that personal income taxes in West Virginia will be reduced by 4 percent beginning in 2025. He said he will call a special session of the West Virginia Legislature this year to discuss further cuts.

West Virginia residents are expected to receive a 4 percent reduction to their income taxes in 2025, with more cuts potentially on the horizon.

While announcing the cuts at a virtual press briefing Wednesday, Gov. Jim Justice said he plans to call a special session of the West Virginia Legislature this year to discuss further reductions.

“Don’t stop at 4 percent,” he said. “I mean, for crying out loud, let’s bump this thing another 5 [percent].”

The cuts were automatically triggered by a 2023 law, which reduces state income taxes each year the state collects more revenue than it did in 2019, with adjustments for inflation.

The state surpassed its own estimates for revenue collections in the latest fiscal year, with a surplus of more than $826 million.

The state collected 12 percent less revenue this fiscal year than last. But it still surpassed figures from 2019, according to reports from the West Virginia State Budget Office, a staff agency for the governor that oversees budgetary information.

The tax reduction rate will be finalized in August, but Justice said he does not anticipate changes to the figure before then.

Justice said his ultimate goal is “getting rid” of state income taxes, which he has made a focal point of his administration. Signed by Justice, the 2023 law also sliced personal income taxes by more than 21 percent — the largest reduction in state history.

In 2023, Gov. Jim Justice celebrated the signing of the largest tax cut in state history with Senate President Craig Blair (left) and Speaker of the House Roger Hanshaw (right).

*Photo Credit: Will Price/WV Legislative Photography*

Critics of the cuts say reduced state revenue means less money for infrastructure and social services. The cuts also come as Justice pursues a flat budget for the state, which means avoiding any year-by-year increases in government spending.

“Reduced state investment” means “school districts are facing unprecedented layoffs, with many paring back course offerings, shuttering services for students with learning and behavioral needs and closing schools,” Kelly Allen, executive director of the West Virginia Center on Budget & Policy (WVCBP), wrote in an op-ed last week.

Even some state lawmakers from Justice’s own party have pushed back against the cuts. Senate Finance Chairman Eric Tarr, R-Putnam, told MetroNews earlier this month that the loss of state revenue from income taxes could require “bloody” reductions to state spending.

But Justice has maintained that reducing income taxes stands to benefit every day West Virginians and increase the dollars they can pour back into the state economy as consumers.

On Wednesday, he also denounced Tarr’s assertion that income tax cuts could hurt residents, and described the WVCBP as “liberal and crazy as crazy can be.”

“We know we can do this. Well then, why don’t we do it? Why in the world don’t we do it?” Justice said. “It’s the people’s money. It’s not our money.”

Justice also noted that the new cuts, paired with an additional 5 percent reduction from state lawmakers, would bring the state roughly one-third of the way toward meeting his goal of eliminating personal income taxes altogether.

While Justice still has several months left to call a special session of the Legislature, he would have to do so before his successor assumes the role of governor in January.

Justice did not provide a specific date for the special session Wednesday, but repeatedly emphasized his commitment to doing so.

“I’m calling everybody back in,” he said. “I want them to be able to do another 5 percent.”

A Budget Surplus, A Coming Special Session And COVID-19 Cases Rise, This West Virginia Week

On this West Virginia Week, Gov. Jim Justice made multiple announcements during a Monday event. The governor said West Virginia residents could soon see their income taxes go down further because the state collected $826 million more in revenue than had been budgeted for this fiscal year.

On this West Virginia Week, Gov. Jim Justice made multiple announcements during a Monday event. The governor said West Virginia residents could soon see their income taxes go down further because the state collected $826 million more in revenue than had been budgeted for this fiscal year.

Justice also said he plans to call another special session of the state’s legislature in the coming months to cut an additional 5 percent from the state’s personal income tax and pass a childcare tax credit.

Plus, we’ll hear about the expansion of the Hope Scholarship and how West Virginians can track their vaccination status during a summer surge of COVID-19.

Emily Rice is our host this week. Our theme music is by Matt Jackfert.

West Virginia Week is a web-only podcast that explores the week’s biggest news in the Mountain State. It’s produced with help from Bill Lynch, Briana Heaney, Chris Schulz, Curtis Tate, Emily Rice, Eric Douglas, Jack Walker, Liz McCormick and Maria Young.

Learn more about West Virginia Week.

Justice Plans To Call Another Special Session

Gov. Jim Justice plans to call another special session of the state’s legislature in the coming months.

Speaking at a revenue announcement event Monday, the governor announced he plans to call a special session in August or September to cut more from the state’s personal income tax.

“So I want to call you back, and I want to challenge you to some way, somehow, try to do an additional 5 percent from the personal income tax,” Justice said. “It’ll be tough, but there’s a way to do it, and all of us can work together and figure out how to do it and how to do it now.”

Justice previously called the legislature into special session in May to make appropriations that were incomplete at the end of the regular session in March.

He pleaded with lawmakers present at the event to pass another piece of legislature when they reconvene.

“The other thing I’m going to ask you to do when I call you back in is address childcare,” Justice said. “Please, for God’s sake a living, pass my childcare tax credit. It was $4.2 million, it’s next to nothing.”

He said the tax credit, paired with another personal income tax cut, will help young families that are, “paying out to ying yang today to try to be able to have childcare.”

“Really, what we need in this state now is young people,” Justice said. “We need people with young families that go to our schools and all that stuff, but in all that we gotta have workers. We have to have workers. The two ways that I would tell you today that can drive more and more and more goodness to West Virginia is lower the personal income tax as much as you possibly can and absolutely some way address this dilemma of child care, we gotta keep our child care organizations going.”

State Budget Revenue Healthy, Officials Unsure About Tax Cut Trigger

State revenue is solid for the year, and over estimates, but down from last year because of personal income tax reductions and severance taxes.

West Virginia tax collections are higher than estimated, but it is unclear if another personal income tax cut will happen in 2025.

Legislators heard Monday from Mark Muchow, the deputy secretary of the state Department of Revenue, about 2024 budget revenue numbers.

“After nine months, the state has collected more than $4.07 billion. That’s $522.9 million above estimate,” Muchow said. “It’s down from last year by 11.6 percent, which is pretty good considering that we cut the income tax by 21.25 percent and some reductions occurred in the severance tax as well.”

Muchow said personal income tax collections are $184.1 million above estimate for the year. He explained that it is down 9.4 percent year to date over last year.

“Again, 9.4 percent is pretty good considering that we cut the tax rates by 21.25 and the income tax as a whole was over 40 percent of general revenue fund collections,” Muchow said.

Severance taxes on coal, gas and oil were budgeted for just $22.1 million for this fiscal year to date. So far, the state has collected $48.129 million. That sounds promising, except the previous fiscal year brought in nearly $85 million at this point in 2023 and is off more than 43 percent.

Since taking office, Gov. Jim Justice has maintained relatively flat budgets and kept budget estimates low as well. That has guaranteed annual budget surpluses. Over the last few years, they have topped $1 billion each fiscal year.

Last year, when the West Virginia Legislature passed the personal income tax cut, the bill included triggers that would further reduce those taxes. The triggers are tied to budget surpluses.

Del. Larry Rowe, D-Kanawha, asked about the trigger mechanism during Monday’s meeting.

“Are you able to project whether the August trigger is going to come into play or not?” he said.

“It’s too early for us to do that type of projection. There’s a lot of revenues outstanding. I do believe that the income tax is going to trend lower over the final, at least over the April, May period, [it] may bounce back in June,” Muchow said. “But there’s too many variables out there to make a good, firm analysis on the trigger.”

“When do you think you’ll comfortably be able to make that calculation?” Rowe asked.

“We will not have a complete idea till the end of June,” Muchow said. “But we’ll have a better idea for the end of April. And even better at the end of May. So by the end of May, things will be a little bit better in focus than they are today.”

“So if we were to have a special session in May, and that has been discussed, then you may have the numbers you need to calculate whether the August trigger will come into play?” Rowe asked.

“We’ll have a better idea, but not a perfect idea,” Muchow said. “Again, there’s a number of variables outstanding that we’d have to consider in that equation.”

The Legislature is expected to return to Charleston for a special session on the budget in mid-May following the election but before the end of the month.

Justice: September Revenue Numbers Show Surplus Growth Return

In a Justice administration media briefing Friday afternoon, Revenue Secretary Dave Hardy said September revenues were $210 million above than the estimated budget

West Virginia’s state administrators note that this month’s state budget numbers show the personal income tax cut is not hurting but helping revenue collections.

With revenue amounts for July and August prompting administrative concern, July being about $7 million, Gov. Jim Justice said the September numbers were really good news.

In a Justice administration media briefing Friday afternoon, Revenue Secretary Dave Hardy said September revenues were $210 million above the estimated budget.

Hardy said even with the 21.25 percent personal income tax cut that passed earlier this year, the state is breaking even with income tax collections compared to where it was a year ago.

“That means that we have grown our personal income tax income about 20 percent,” Hardy said. “That’s the story for September, that the state income taxes and our incomes are growing to show that type of revenue growth in such a quick way.”

Hardy said September corporate net income tax collections were $54 million above estimate, growing by 2.2 percent compared to a year ago.

He also said the consumer sales tax was $11.2 million above estimate for September, almost 10 percent above where it was for September 2022.

Independent budget analysts have repeatedly said the Justice administration sets its monthly revenue estimates artificially low.