By RUSTY MARKS
The State Journal
CHARLESTON, W.Va. — Members of the West Virginia House of Delegates dealt another blow to Gov. Jim Justice’s revenue and budget plans on Thursday, May 18 by advancing their own tax and revenue bill and ignoring a revenue bill passed this week by the state Senate.
(Photo by Perry Bennett, WV Legislative Photography)
Justice and Republican leaders in the Senate have proposed a revenue plan that includes raising the state sales tax from 6 percent to 6.85 percent, adding sales tax to telecommunications and digital services, restructuring state income tax brackets and gradually phasing out the personal income tax while raising fuel taxes and DMV fees to help pay for road construction.
Revenue and tax reform portions of the plan, championed by Senate Republicans, were contained in Senate Bill 1007, which passed the Senate on Tuesday, May 16. Senate Democrats voted against the bill, saying it created tax cuts for the wealthy but didn’t do enough to help the middle and lower classes.
As passed out of the Finance Committee, the House version of the bill, House Bill 107, would not raise the state sales tax, but it would remove exemptions from some goods and services that currently are not taxed. The finance committee also scrapped a request by Justice to raise corporate income taxes.
The committee kept a provision that would tax telecommunication services, but dropped a tax on digital services over concerns that it might hamper efforts to extend broadband internet coverage in the state. The committee also tweaked provisions that would require transportation companies to pay tax on certain goods and services.
The committee also removed a coal severance tax cut included in the bill requested by the governor. Delegate Isaac Sponaugle, D-Pendleton, who co-sponsored the amendment to remove the tax cut with Delegate Daryl Cowles, R-Morgan, said the tax cut would be nice but said the state needed the money. Doing away with the tax cut would put about $50 million back into the budget, he said.
The committee scrapped the Senate’s plan to change income tax brackets and roll back personal income tax rates, but increased the standard income tax exemption from $2,000 to $2,500. The committee also exempted military retirement income from income tax, and would phase out paying income tax on Social Security income over a three-year period.
House Bill 107 was taken up on the House floor and read a first time Thursday evening. The House may suspend its normal rules and vote on the legislation Friday, May 19.
Also Thursday, the House voted to suspend normal rules to pass a bill that would allow for the furlough of state employees in the event of a government shutdown. The legislation, House Bill 106, was heavily amended in committee.
The original version of the bill gave the governor broad powers to furlough employees in the event of a fiscal crisis. The version passed by the House by a vote of 82-2 would limit the ability to furlough employees to the failure of the Legislature to pass a budget before July 1, or a gubernatorial veto.
However, the bill went beyond the original version of the legislation, and also would allow the Legislature to make emergency appropriations to fund essential services in the event of a government shutdown, and would protect employee benefits and seniority in the event of a furlough. The bill also would provide for back pay after the furlough is over.
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