This week, state officials certified a 4 percent reduction to West Virginia’s personal income taxes, effective Jan. 1. The reduction was anticipated for weeks, but became official Thursday.
Next year, West Virginia residents will see a smaller portion of their paychecks go toward taxes.
The state officially granted a 4 percent reduction to its personal income tax, effective January 1, 2025. The tax cut was certified Thursday by State Auditor J.B. McCuskey and Larry Pack, acting secretary of the West Virginia Department of Revenue.
The certification follows an early July announcement from Gov. Jim Justice that the state anticipated a reduction to personal income taxes. This was credited to a 2023 law, which automatically triggers income tax cuts when the state revenue surpasses figures from 2019, adjusted for inflation.
Justice has repeatedly expressed a desire to see state income taxes eliminated outright and has described the cuts as a way to support consumers and attract businesses and residents to West Virginia. In 2023, he signed into law a 21 percent reduction in state income taxes, the largest cut in state history.
Some elected officials and economic analysts have expressed concern that reducing taxes could hurt state services like Medicaid and public education by reducing their access to funding.
Still, Justice, McCuskey and Pack described the latest round of cuts as a win for everyday West Virginians.
“While it won’t happen during my time as your governor, our state is on a pathway to eliminating its personal income tax. So, let’s keep the ball rolling in the same direction,” Justice said in a Thursday press release. “Getting rid of the personal income tax will bring more goodness and more people to our beautiful state.”
West Virginia took in more than $335 million last month, narrowly exceeding state estimates. The state also collected slightly more money last month than it did the July prior.
The state’s revenue collections for July narrowly surpassed monthly estimates, as well as the total collections by this time last year.
West Virginia took in more than $335 million last month, exceeding estimates from the West Virginia State Budget Office by less than 1 percent. The State Budget Office is a staff agency for the governor that oversees budget and revenue information.
The state also collected slightly more money last month than it did the July prior. In July 2024, West Virginia’s state revenue was less than 1 percent higher than it was in July 2023.
July marks the first month of a new fiscal year for the state. A 4 percent cut to personal income taxes will be implemented at the start of the new calendar year, and additional tax cuts will likely be considered by state lawmakers.
If the state revenue follows trends from the most recent fiscal year, these reductions likely mean the state will take in less money this year than last. After sweeping tax cuts in 2023, the state collected 12 percent less revenue last fiscal year than the fiscal year prior.
Gov. Jim Justice has touted the tax cuts as a way to empower consumers in West Virginia, and to attract new residents and businesses. He also voiced aims to cut income tax further, with an ultimate goal of “getting rid” of the state’s personal income tax altogether.
“It’s the people’s money,” Justice said in a virtual press briefing in late May. “It’s not our money.”
Likewise, Justice has made reducing government spending a focal point of his tenure. During this year’s legislative session, the governor advocated for a flat budget, meaning one that does not increase year by year even if inflation or operating costs rise.
Justice’s financial decision-making has not been met without opposition. Some residents and state lawmakers have expressed concern that less money for the government means less funding for state services, like Medicaid and public education.
To secure further tax cuts during the months that remain of his tenure as governor, Justice would have to convince state legislators to pass additional reductions during a special legislative session.
He has expressed an intention to call lawmakers back to the state capitol to discuss further cuts by September, but a date for any such session is yet to be finalized.
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 trigger policy in a 2023 law could cut income taxes by up to 4 percent based on the revenue collected by the state this fiscal year, according to Gov. Jim Justice.
West Virginia residents could soon see their income taxes go down further.
That’s because the state collected $826 million more in revenue than had been budgeted for this fiscal year, according to Gov. Jim Justice.
A 2023 law that cut state income tax by more than 20 percent also set triggers for future cuts. Any time the state collects more revenue than it did in 2019, the law automatically reduces taxes based on the revenue gained.
Justice said during a virtual press briefing Monday that cutting taxes could increase spending in West Virginia.
“It’s the people’s money,” he said. “If there’s a way to do it and put more money back in the people’s pockets, you know what will happen? They’ll spend it here.”
While a final figure hasn’t been pinned down, Justice said he expects the trigger to cut income taxes by “3 or 4 percent.”
For fiscal year 2024, which ended in June, the state collected $5.7 billion. This exceeded an estimate of $4.88 billion set by the state.
Despite the surplus, that figure is below the state’s revenue this time last year. By the end of fiscal year 2023, the state had collected $6.48 billion.
Analysts say the income tax cuts have led to the decline in annual state revenue collections — a trend critics say has reduced funding for state services, but that Justice says gives residents more control over how they spend their money.
During a virtual press briefing Tuesday, Justice indicated that he sees value in cutting income taxes further, and would be open to such changes even if the threshold for the 2023 trigger law is not met.
Last year, West Virginians received the largest personal income tax cut in state history, with Gov. Jim Justice signing a law slashing income tax by 21.25 percent.
But beyond the immediate tax cut, the law also provided the possibility of triggering additional tax cuts once the state revenue surpasses its total from 2019, indicating economic growth for the state.
Throughout his tenure as governor, Justice has called for even more significant income tax cuts, suggesting that dollars not collected by the state would be pumped back into the economy by consumers across West Virginia.
During a virtual press briefing Tuesday, Justice reaffirmed that he sees value in cutting income taxes further, and would be open to such changes even if the threshold for the 2023 trigger law is not met.
“We reduced the income tax by $750 million. It’s in the hands of all West Virginians. They spend the money,” he said. “They spend it here, and the multiplier effects just go and go and go and go.”
Some lawmakers have expressed concern that reduced income taxes could mean less funding for state resources. But Justice suggested Tuesday that cutting income taxes would only help attract more residents or businesses to West Virginia, and bolster economic consumption within the state.
“There is nothing that would drive more goodness to West Virginia than to get rid of our state income tax,” Justice said.
Lawmakers could pass additional cuts during next year’s regular legislative session, beginning in January 2024.
But changes could come even sooner if the governor calls a special legislative session — or if three-fifths of both chambers of the West Virginia Legislature agree to enter a special session to discuss the cuts, per state code.
West Virginia collected roughly 16 percent less revenue last month than it did in May 2023. Still, this number exceeded state officials’ predictions by $63.7 million.
The latest figures mark a continuation of a months-long decrease in annual revenue for the state, which budget analysts have partially attributed to sweeping income tax cuts signed into law by Gov. Jim Justice last year.
The decrease in revenue also came up about $19 million short of estimates set by the West Virginia State Budget Office, a staff agency for the governor that oversees budgetary information.
West Virginia’s revenue for this fiscal year still exceeds estimates set by the office by 14 percent, marking a budget surplus of more than $600 million.
But the state has collected roughly $800 million less this year than it had by May 2023.
Justice did not directly address the decreased revenue in a video posted online Sunday. But he said exceeding the State Budget Office’s estimates this fiscal year is proof of strong financial decision-making from his administration.
“There’s all kinds of goodness happening. And a great deal of it is all because of the surpluses we are having because we minded the store properly,” he said.
Still, some budget analysts have expressed that a decrease in overall revenue collections could mean less money for infrastructure, education resources and Medicaid.
June is the final month of the State Budget Office’s current fiscal year, which marked the first full fiscal year with Justice’s income tax cuts in place.
