By February 5, 2017 Read More →

Editorial: Don’t Kill Jobs Or Hurt Families

From the Wheeling News-Register:

State revenue was down again last month, reinforcing to Gov. Jim Justice and West Virginia legislators that dramatic action is needed to get the budget in balance.

Any debate over how to do that ought to be erased by a glance at the revenue report for January. A look at it makes two things clear:

– Many West Virginia families are in deep financial trouble.

– Job-providing businesses are even worse off.

Justice is expected to reveal his budget recommendations for the upcoming fiscal year on Wednesday, during his first State of the State speech. Though he has been secretive about precisely what he will propose, there have been indications his plan includes state spending cuts of between $390 million and $600 million a year.

That range is about the same as projections for the budget shortfall facing the state in fiscal 2018, which begins July 1.

Justice and many legislators, including state Senate President Mitch Carmichael, R-Jackson, have said deep cuts in spending are needed.

Others have advocated increasing taxes, under the guise of diversifying the state’s tax base. Exemptions to the state sales tax should be eliminated, they say.

Various figures regarding how much new revenue that might bring in have been cited. They range from $1 billion to $2.5 billion. Even the lower number is far more than would be needed to balance the budget.

Some tax-and-spend advocates insist all the exemptions, perhaps including the sales tax on food, should be repealed.

But look at the January revenue report: Collections for the first seven months of FY 2017 were $116 million below projections on which spending was based. Adjustments are needed.

Now, scrutinize the line items. Reduced severance tax collections have been cited as a primary reason for budget woes. During the first seven months of the year, 98 percent of what had been expected from that source was collected.

Look next at the percentages for other line items:

– Personal income tax, 95 percent.

– Consumer use and sales tax, 92 percent.

Those two returns are an excellent indicator of how well West Virginia families are doing. If they are making less money, they pay less income tax. They also spend less and pay less sales tax.

Mountain State families cannot bear a tax increase.

Repealing sales tax exemptions would hurt many of the very businesses that provide what jobs we do have in West Virginia.

Look at more revenue shortfalls:

– Business and occupation tax, 91 percent.

– Corporate income and franchise taxes, 79 percent.

Clearly, many businesses are struggling, too.

Legislators should ask themselves a simple question: How many jobs would we kill by repealing sales tax exemptions that affect businesses?

During an event Friday, at which members of the press were briefed on various issues facing the state, one lawmaker said that much of what government spends is required by specific laws. They affect as much as 67 percent of the budget.

Struggling families and businesses may have an idea about that:

Change the law.

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