Trigger Law Could Cut Income Tax By Up To 4 Percent

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.