Democrats in the West Virginia Legislature are criticizing Gov. Jim Justice’s State of the State address as being vague on details about a major tax reform proposal and lacking discussion about other key issues, including broadband expansion.
Leaders from the minority party offered their response Thursday to Justice’s address during a news conference at the Capitol, with House Minority Whip Shawn Fluharty, D-Ohio, and Sen. Richard Lindsay, D-Kanawha, speaking on behalf of their respective caucuses.
“It was very much deja vu. It was very similar to past state of the state speeches. Big on sound bites, little on substance,” Fluharty said.
Among Justice’s top priorities announced Wednesday is the reduction of the state’s personal income tax. Revenue from the tax makes up $2.1 billion — or more than 40 percent — of the current fiscal year’s $4.6 billion general revenue budget.
Justice said Wednesday he wants to cut the income tax in half for everyone except the state’s “super-high earners,” who he said would see a reduction by one-third. Democrats noted Thursday they are unaware of what income threshold would determine a person’s level of tax relief.
To account for the loss in revenue, Justice is calling for a slew of tax increases — including a restructuring of taxes on oil, gas and coal, as well as hiking taxes on consumer sales by 1.5 percent. Another proposal would increase taxes on soda and tobacco. Justice also called for a tax on the state’s most wealthy.
Justice also offered another unique way to backfill any lost revenue, proposing to put unspent federal coronavirus relief dollars in a “bucket” as a reserve. For months, Democrats had called on the governor to call lawmakers back into session to appropriate funds from the CARES Act and other federal dollars that have come to the state, although no such session ever took place.
“During that time since March, how many businesses have closed? How many people have been harmed by his conduct of sitting on this money designed to help them?” Fluharty asked rhetorically.
According to the state auditor’s office, the state had more than $665 million in unspent CARES Act funds as of Monday, Feb. 8.
Justice and other Republican leaders — including Senate President Craig Blair — have promised that the reduction of the personal income tax will be neutral or possibly offer citizens some tax relief. But Democrats said Thursday they remain wary of such a promise, especially with specifics on the proposed tax shifts not yet public.
“I do find it hard to believe that most West Virginians will see a net relief on their taxes, based upon what he said last night,” Lindsay said.
Democrats also took issue with little mention of broadband expansion in Justice’s roughly hour-long speech.
“Before the election, the governor and all the Republicans got together and promised broadband infrastructure. [They] promised it — you’ll have $100 million in the budget. We got one sentence on broadband last night in the State of the State — one,” Lindsay said. And even more importantly, there’s no $100 million in the state budget for broadband this year, not even mentioned.”
With Republicans holding supermajorities in both the House and Senate, minority Democrats say they’re hoping to have as much influence in shaping policy.
“Ideas, good or bad, usually don’t have a party designation — to the extent that I’m not going to refuse an idea just because it comes from a [Republican],” Lindsay said. “No one has a monopoly on good ideas or good policies. So, I hope that we are included in these discussions.”
Legislation on the proposed income tax reduction has not yet been introduced or made public by the Governor’s office.