By Charles Young, The Exponent Telegram
CHARLESTON, W.Va. — State officials predict that about $5.26 billion in total revenues will be collected in Fiscal Year 2025, a decline of 7.8% compared to the previous fiscal year.
Deputy Revenue Secretary Mark Muchow, during testimony Monday before the Legislature’s Joint Standing Committee on Finance, explained the factors expected to contribute to the drop of around $446 million.
“We expect the personal income tax to be lower,” he said. “That’s because phase two of the tax cuts start after Jan. 1; that’s the property tax rebate credit. Those come into play. Then on top of that … we have a 4% personal income tax reduction that kicks in on Jan. 1 of 2025.”
Gov. Jim Justice signed House Bill 2625 into law in March 2023, which included a 21.25% reduction in the state’s personal income tax.
The bill also contained triggers for further future personal income tax cuts based on revenue collection benchmarks. Based on collections during FY 2024, an additional 4% cut to the tax will go into effect on Jan 1.
Justice proposed three new tax reduction measures prior to last year’s regular legislative session: Eliminating tax collections on Social Security benefits, a child care tax credit and a senior citizen homestead property tax credit.
Although the Department of Revenue had assumed lawmakers would approve all three, they only approved the Social Security measure, Muchow said.
