Legislature gavels back in for special session with two new bills on call, changes to revenue proposal


The Register-Herald

CHARLESTON, W.Va.  — The West Virginia Legislature gaveled back into special session Monday with two more bills added to the call.

On Monday, Gov. Jim Justice added a bill to increase the consumer sales tax and use tax on vehicles and a bill authorizing the furlough of state employees in the event of a government shut down.

The Senate gaveled in at 11 a.m. taking up a resolution recognizing Huntington as grand prize winner in America’s Best Communities Competition before recessing until that afternoon.

In the afternoon session Sen. Charles Trump, R-Morgan, said the bills — the furlough bill, the sales and use tax on vehicles and the revenue bills — were not formatted properly. He said he expects to have them for formal introduction today.

The House introduced the furlough bill, House Bill 106, Monday and sent the bill to the committee on government organization and the committee on the judiciary.

After the morning floor session, Senate President Mitch Carmichael explained some of the changes in the revenue proposal. Carmichael said there are areas of agreement with the House in the proposal.

Delegate Eric Nelson, R-Kanawha and chair of the finance committee, said he liked that corporate net income tax has been taken out of the proposal. However, he mentioned concerns with lowering the personal income tax.

House Finance Chairman Delegate Eric Nelson, R-Kanawha

Carmichael said instead of having a 7 percent consumer sales tax, the current proposal is 6.85 percent.

“The governor conceded to the House’s position that they didn’t want to go to 7 percent so he came back with 6.85 percent,” he said.

This will mean a slowed down implementation of lowering the personal income tax. Carmichael said instead of reducing personal income tax by 20 percent, it will be reduced by 15 percent Jan. 1.

The personal income tax reduction, Carmichael said, would still be weighted at the lower-income level providing a 40 percent reduction and about a 10 percent reduction at the higher end.

Last week, the Senate added in a bracket for families who earn more than $300,000. Carmichael said at the request of the democratic caucus, this top bracket has been reduced to annual incomes of $250,000.

One of the new elements of the proposal is eliminating the tax exemption for mineral transmission.

“In general, it has to do with taxing components providing sales tax on components for things like building pipelines and things like that,” Carmichael said.

Another exemption that would be eliminated would be direct use for communications.

Carmichael said one of the big pieces to the budget is imposing a “privilege tax.” He said licensing a vehicle in West Virginia is subject to a 5 percent tax, which would go up to 6 percent under the proposal. Carmichael said this increase of the tax would bring in roughly $40 million.

Carmichael mentioned a few concerns with implementing a 2 percent teacher pay raise. He said this measure isn’t out of the question but his concern is pay raises for all state employees.

“The concern is that we want to provide enhanced pay for all state employees. To single out one group was problematic,” Carmichael said. “We are reviewing that and are continuing to look at it. …We know our teachers need additional money. They do and they deserve it but so do all of our state employees.”

Last week, after the House voted to reject the first tax bill, the Senate reworked Senate Bill 1004 before passing it. Over in the House, following a brief debate on a failed motion to send the bill to the House Committee on Finance, the House rejected the bill on a 59-34 vote.

“For those who want to say no, it’s incumbent for them to come up with an alternative,” Carmichael said. “Saying no isn’t an alternative.”

After the House’s afternoon floor session, Delegate Eric Nelson, R-Kanawha and chairman of the House Committee on Finance, said one concern he has is not having a revenue bill or a budget bill.

“We’ve heard through the whole session of government expenditures being on the right level, working within your means, and I think we need to have both of those at the same time,” Nelson said.

Nelson said his biggest concern is lowering the personal income tax and what that would do to the budget in the next few years.

“In my seat right now, I’m not only looking at the 2018 budget, but looking at 2019, 2020 and 2021,” he said. “We are not doing the citizens of West Virginia service when year after year, we are worrying about a budget instead of making it structurally sound.”

Nelson said he likes that corporate net income tax has been taken out of the most recent proposal.

“Talk about something that will make us truly uncompetitive and we’re supposed to be business friendly — that would do that if you raise the tax by a point,” Nelson said.

He said border county delegates have expressed their concerns on the proposed 6.85 percent consumer sales tax and what that would do to sales within the county.

“It’s a fair debate and I think we’re listening to that,” he said.

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