From The Herald-Dispatch of Huntington:
West Virginia state government is facing a $500 million budget deficit, and ideas about budget cuts, new revenue streams and tax reform are coming up left and right.
With the declines in traditional revenue from energy severance taxes and gaming, lawmakers know that it is a new day and time to the think outside the box. That can be a good thing, but they also need to remember that the public will ultimately pay these bills, and the public deserves good information about the impact tax changes would have on their lives and livelihoods.
For example, the state Senate is considering a bill that would radically change the state sales tax, both in terms of the percentage charged – possibly as much as 8 percent – and the goods and services that would be taxed. The plan would also begin to reduce the state income tax and phase it out completely by 2021.
But when state Sen. Bob Plymale of Wayne County asked the Senate Select Committee on Tax Reform to delay consideration until a “fiscal note” was done on SB 335, proponents basically said they did not want to wait on the results.
For years, lawmakers on both sides of the aisle have raised the point that before the legislature starts fiddling with the laws, they should assess the economic impact of those changes. That is what the “fiscal note” is supposed to do. While the accuracy and the thoroughness of the reviews can vary, at least it is a place to start the debate.
Proponents feel significant tax reform could be a very positive change for West Virginia, taxing people more fairly on what they consume rather that how much income they have. Others argue that the measure would shift more of the tax burden from the wealthy to working class residents and perhaps make the state’s revenue system even less stable.
Who’s right? That would require a thorough analysis and study of what has happened in other states that have taken similar steps. But with such a big change, shouldn’t the public have a chance to see that work done and debate the pros and cons?
There are plenty of other “new revenue” ideas out there, too, from a sugary drink tax and higher tobacco tax to other changes in the sales tax structure and new taxes on business. In all of those cases, the public deserves the best analysis possible on the economic impact that each change would have.
Changes that could affect business hiring or competitiveness for our many border counties especially need close scrutiny. Moreover, most of the changes will eventually trickle down to the consumer household level.
When you consider that lawmakers are looking for an extra $500 million and there are 741,000 households in the state, that’s $674 per household. But with 18 percent of West Virginians living below the poverty level, many of those households probably cannot realistically contribute much. So, the impact could be much greater for most families.
This year, more than ever, the public deserves to know what is being proposed and how it would affect them.