The number could be even bigger if lawmakers reverse a change they made in 2016, Secretary Jimmy Wriston testified.
The West Virginia Department of Transportation reports an “unheard number” of projects under contract for the year.
As the year comes to a close, Transportation Secretary Jimmy Wriston told lawmakers his department has a billion dollars of projects under contract.
“That’s unheard of in Highways,” he said.
Still, Wriston told the Joint Oversight Commission on Transportation Tuesday, the number could be even bigger if lawmakers reverse a change they made in 2016.
Prior to then, Wriston said, a sales tax on road construction materials directly funded the department’s projects. But lawmakers diverted those revenues to the general fund.
“Just looking at that sales tax, you could see how much more we could be doing,” Wriston said.
Wriston estimated the revenues to be in the tens of millions.
Daniel Linville, R-Cabell, chair of the joint commission, told Wriston that restoring the sales tax revenues to the department is something “I’d personally like to see us correct there.”
There will be a Sales Tax Holiday from Friday, Aug. 4, through Monday, Aug 7, at 11:59 p.m.
West Virginia families doing back-to-school shopping this weekend will save a little bit of money. There will be a Sales Tax Holiday from Friday, Aug. 4, through Monday, Aug 7, at 11:59 p.m.
During the holiday, certain back-to-school items are exempt from sales tax, such as clothing, school supplies, school instructional materials, laptops and tablets, and sports equipment.
To learn more about what can and cannot be purchased tax-free during this time and for additional information about the Sales Tax Holiday, click here.
The average customer will save at least 6 percent on every qualified purchase and up to 7 percent if they purchase the item in a municipality that has imposed a local sales tax.
During the holiday, the following items are exempt from Sales and Use tax:
Certain clothing with a purchase price of $125 or less
Certain school supplies with a purchase price of $50 or less
Certain school instruction material with a purchase price of $20 or less
Certain laptop and tablet computers with a purchase price of $500 or less
Certain sports equipment with a purchase price of $150 or less
Items purchased for use in a trade or business are not exempt under the sales tax holiday
From Friday, August 5 through Monday, August 8 families will be able to save money on purchases made during the state’s annual back-to-school Sales Tax Holiday.
This weekend,West Virginia families can save money on back to school purchases.
From Friday, August 5 through Monday, August 8 families will be able to save money on purchases made during the state’s annual back-to-school Sales Tax Holiday.
Clothing, school supplies, laptops and sports equipment will qualify for the tax break with a savings of at least six percent on qualified purchases and up to seven percent in municipalities with a local sales tax.
There is no limit on the amount of the total purchase. The qualification is determined on the amount of the total purchase and by each individual item.
Bridget Lambert, executive director of the West Virginia Retailers Association, said the benefits are huge for families faced with inflation on every front.
“It certainly makes a big difference to families, particularly with multiple children or during the tough economy coming out of the pandemic last year, particularly,” Lambert said. “Our stores saw a two and three fold increase in the shopping for school aged children during the weekend last year.”
While online purchases also qualify, items used in a trade or business are not considered eligible for the tax break.
Lambert added that the influx of school shoppers the tax break brings into their stores during a normally low summer season, is something retailers celebrate.
The Sales Tax Holiday will be all day Friday through Monday.
More information on the Sales Tax Holiday can be found on the West Virginia Department of Revenue’s website.
Members in the House of Delegates have approved their budget bill for fiscal year 2018 – bringing $140 million additional dollars in revenue and making $75 million in cuts to government agencies. The House’s budget is largely based on revenue brought in under a Senate bill that was drastically changed by the chamber’s finance committee.
That bill, Senate Bill 484, originally would have just captured some $12 million a year that goes into the state Road Fund, but while it still contains the provision, it’s been transformed into what House leadership is calling a tax reform measure. The House’s version looks to broaden the base of taxable goods and services in two phases, July and then October of this year. Under the plan, things like cell phones or personal services would become subject to the sales tax, bringing in some $140 million in additional revenue in the 2018 budget.
Credit Perry Bennett / West Virginia Legislative Photography
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West Virginia Legislative Photography
Del. Daryl Cowles, R-Morgan, House Majority Leader.
The bill would also require that by July 2018, the state’s current 6 percent sales tax would be reduced to 5.5 percent, then to 5.25 percent in July 2019. Over time, if the fiscal climate is favorable in the state, the tax rate could go down to as low as 4.75 percent. That reduction of the overall rate will also lead to deficits in the state budget, that is if spending doesn’t increase in the state.
Majority Leader Daryl Cowles of Morgan County adamantly supports the measure, saying West Virginia’s border counties will see a boom in revenue.
“It’s tax relief for the people of West Virginia,” Cowles said, “It does capture revenue in the short-term, it is very quickly, within two short years, revenue neutral as the rate is lowered for everyone on every purchase, point of sale that’s taxed. And then, for another two years, the rate drops all the way down to 4.75. Imagine that. Imagine the growth our border counties could see if we have a competitive advantage at a tax rate of 4.75 considerably lower than all of our surrounding neighbors.”
But Minority Finance Chair Delegate Brent Boggs, of Braxton County, says he’s concerned this revenue idea lacks fairness.
“It seems like with this, when we’re talking about broadening the base, we’re really not broadening much, because it’s all the things that we’re not picking up, and we seem to be disproportionately hitting the people that are at the low income and middle income level, and possibly that takes in a lot of our seniors,” Boggs said.
After nearly two hours of debate, Senate Bill 484 passed 52 to 48.
Credit Perry Bennett / West Virginia Legislative Photography
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West Virginia Legislative Photography
Del. Brent Boggs, D-Braxton, House Minority Finance Chair.
House Budget
In an evening floor session Wednesday, delegates also took up the chamber’s budget bill, House Bill 2018, which relies on $75 million in cuts to state agencies to balance the budget. The House’s budget no longer includes the 2 percent pay raise to classroom teachers first proposed by Gov. Jim Justice. It reduces funding for West Virginia four-year higher education institutions by 6 percent and the state’s community and technical colleges by 5 percent.
The budget also grants the Higher Education Policy Commission the authority to decide how the state’s higher education dollars will be divided between institutions.
It was this part of the budget that had some delegates in the House concerned. Several Democrats argued the provision is unconstitutional, including Delegate Rodney Miller, a Democrat from Boone County, who says the House had even considered getting rid of the organization at one point.
“It’s interesting that we are giving them the pot of money to let them be the arbitrator, the disseminator of this funding; letting them be the ultimate choice when at the same time,” Miller said, “during this legislative session, we had, if I’m not mistaken, we had some legislation proposed to actually either get rid of or completely alter, significantly change the CTCs and HEPCs in our state. Now we’re going to give them all this power and authority and money. It’s very confusing with the consistency of what we have going on in this body.”
Credit Perry Bennett / West Virginia Legislative Photography
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West Virginia Legislative Photography
Del. Mike Caputo, D-Marion.
Democrat Mike Caputo, of Marion County, says allowing the HEPC to control higher education spending will result in a lack of accountability.
“These folks, they’re appointed for a certain term. They don’t have to account to the people; they don’t put their name on the ballot. We put our name on the ballot. And that bothers me,” Caputo explained. “I don’t know who come up with this crazy idea to throw all the money in one pot and just let some people toss it out how they feel without any accountability. Mr. Chairman, with all due respect, that to me is just absolutely irresponsible.”
Republican Delegate Mark Zatezalo, of Hancock County, spoke in support of the budget bill, and suggested the HEPC work more closely with the state’s colleges and universities than the Legislature does.
“We are allocating resources to two groups who have the most interface with higher education, and I’m wondering if they might have more insight into how things are spent at the higher education level than we do,” Zatezalo noted. “I certainly, you know, I can see money go in and out of here, and I can see money allocated for schools; frankly I’m not in the weeds enough for each school to understand exactly what they need and exactly who needs the money.”
Credit Perry Bennett / West Virginia Legislative Photography
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West Virginia Legislative Photography
Del. Mark Zatezalo, R-Hancock.
House Finance Chair Eric Nelson argued this was a tough budget year all around, but when it came to giving the HEPC the authority, it makes the most sense.
“I mentioned we had a bunch of agencies come before us to give budget presentations. The presentation for Higher Ed and CTC was made by HEPC and the CTC chancellors,” Nelson said. “It was not the individual colleges. You know what, we had very tough choices, and we’ve been in some unchartered territory. It’s been a balancing act. This balance is structurally sound; difficult decisions had to be made. Without a doubt, this has been an all-inclusive and a very transparent process.”
The House’s budget bill passed on a vote of 58 to 42.
Yet another plan to restructure taxes in West Virginia has been taken up by members of the House of Delegates.
The House Finance Committee was presented with their version of a Senate Bill 484 during a Saturday afternoon meeting.
The bill was initially presented to lawmakers by Gov. Jim Justice as a sweeping tax increase, raising some $450 million in new revenues.
As it passed out of the Senate, though, the measure only included recapturing some $12 million in annual sales tax revenue generated from some road construction purchases. Those funds are typically transferred to the state Road Fund, but the Senate’s bill would keep them in general revenue for legislative appropriation.
On Saturday, the House Finance Committee was presented with a new version of the bill that goes above and beyond that measure, and essentially refutes the economic theory behind previous tax reform measures considered in the Senate.
The new House version of Senate Bill 484 is a “broadening the base” measure, according to House Finance Chair Eric Nelson. It still contains the capture of state Road Fund dollars, but also gets rid of several exemptions in the consumer sales tax in two phases.
Credit Perry Bennett / West Virginia Legislative Photography
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West Virginia Legislative Photography
The House Finance Committee during a February meeting.
On July 1 of this year, salon services, contracting services, and cell phone bills would be subject to the sales tax. The exemptions for gym memberships, electronic data services, primary opinion research, and some direct use services would end on October 1.
On July 1, 2018, the bill would reduce the states 6 percent sales tax to 5.5 percent. It would again reduce to 5 percent on July 1, 2019, and 4.75 percent on July 1, 2020.
Unlike previous tax reform measures considered in both chambers, this version of the bill does not make changes to the personal income tax.
In all, analysts say the changes to the sales tax alone in the bill would result in a $137 million increase in revenues in the 2018 fiscal year, a $56 million reduction in 2019, a $66 million reduction in 2020, and a $125 million reduction when fully implemented in 2021.
House Finance Policy Analyst Fred Lewis told members of the committee, though, that the reductions in revenue do not account for any potential growth in spending the state could see as a result of a lower sales tax rate.
When fully implemented, the rate would be the lowest of any state to border West Virginia. Kentucky, Maryland and Pennsylvania have a 6 percent consumer sales tax. Ohio’s is 5.75 percent and Virginia’s 5.3 percent.
Credit Will Price / West Virginia Legislative Photography
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West Virginia Legislative Photography
Senate Finance Chair Mike Hall on the Senate Floor.
The plan is the exact opposite of what Senate Tax Reform Committee Chair Robert Karnes had pushed through his committee. The Senate’s tax reform plan– although it went through many iterations– was based on the idea of increasing the consumer sales tax while reducing personal income taxes. Karnes argued that would incent economic growth in the state.
“Over here there’s no argument that getting rid of the income tax will cause you to grow. It’s the lowering of the sales tax so it’s just an opposite view,” Senate Finance Chair Mike Hall said after the meeting. Hall attended to hear the presentation of the House’s version of the bill.
“The theory is that we’re 70 percent a border state so I guess the thinking is that if you lower the consumption taxes to lower than your surrounding states that may, on the margin, attract people to come or at least not leave the state to buy things,” he said.
Still, Hall said the generation of some $140 million in new revenues for the 2018 fiscal year due to the end of some exemptions and the recapturing of the Road Fund dollars may not be attractive to the Senate.
“You’re still raising taxes in terms of though you’re lowering the rate, you’re taxing new things,” he said. “There doesn’t seem to be much appetite for tax increases in the Senate right now, at all, even from broadening the base.”
“If the revenue estimate increases one penny over last year’s revenue estimate there appears to be, among the leadership, a resistance to that at this point.”
The House Finance Committee will continue discussion of the bill Monday morning.
Should the chamber approve the amended version, Senate Bill 484 would have to go back to the Senate for its approval. If Senators refuse the House version of the bill, it will go to a conference committee for a final version to be negotiated.
The West Virginia House of Delegates has killed another revenue increasing bill – one that would’ve generated an estimated $215 million in three years.
House Bill 2933 has taken several forms as it worked its way through the House of Delegates. In its latest form that was set for a vote Wednesday, the bill would’ve reinstated a 3 percent food tax in October of this year and eliminated a number of exemptions to the current sales tax – things like daycare services, cell phones, or personal and professional services.
It would’ve lowered the sales tax from 6 to 5 percent in July 2018, and it would’ve put a flat 5.1 percent rate on the personal income tax.
Several delegates swore on the campaign trail they would not support any revenue increases, and some members even tried killing the bill on its first reading in the chamber Saturday. By the time the bill reached second reading Monday, it had over a dozen pending amendments.
Consideration of any of those amendments and the bill itself were delayed multiple times before it was ultimately laid over Wednesday night. Wednesday, however, was crossover day, or the final day members can vote on bills originating in their chamber. That procedural move kills the bill and prevents lawmakers from putting it to a vote.
A similar tax reform measure, however, passed out of the State Senate Wednesday. That bill increases the sales tax, creates a new structure for the personal income tax, and lowers the severance tax on coal.
