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WV House passes tax reform, balanced budget bills

From the West Virginia House of Delegates: 

CHARLESTON, W.Va. – The House of Delegates Wednesday passed bills to balance the state’s budget while also providing comprehensive tax reform to give long-term tax relief to citizens and improve West Virginia’s economy by making it more competitive with surrounding states.

“I have said from the beginning of this session that we should not let this current budget crisis overshadow the opportunities before us to make bold, long-term reforms to help improve our state,” said House Speaker Tim Armstead. “In passing this budget and our tax reform measure, we put our state on a path to control spending while also making our tax system more fair and competitive.”

Delegates passed Senate Bill 484<>, which as amended by the House would broaden the state’s sales tax base while reducing the overall rate in the coming years.

By eliminating certain special exemptions and carve-outs in the code, the state will be able to reduce its overall sales tax from 6 to 5.25 percent by July 2019. There are also “triggers” built into the bill that would allow the rate to continue dropping to as low as 4.75 percent in further years, if certain budgetary benchmarks are met.

“This bill is designed to treat our taxpayers more fairly and provide additional relief by eliminating many of the special carve-outs that have been placed in the code over the years,” said Finance Committee Vice-Chairman Eric Householder, R-Berkeley. “Broadening the base and lowering the rate will make us more competitive with our surrounding states, eventually giving us the lowest sales tax in the region, and encouraging more consumer spending in our stores and businesses.”

The tax reform measure was a key component of the House’s budget plan, House Bill 2018<>, which passed Monday evening. The House’s $4.2 billion General Revenue budget proposal spends $259 million less than the $4.5 billion plan Gov. Jim Justice proposed at the beginning of session.

“This budget controls government spending, cuts our reliance on one-time funds, and avoids many of the hefty business and sales taxes that have been proposed by the Governor,” said Finance Committee Chairman Eric Nelson, R-Kanawha. “More importantly, this budget avoids drastic cuts to public education, higher education, and the health care services provided through the Department of Health and Human Resources.”

The House budget eliminates the Department of Education and the Arts and Courtesy Patrol. Additional spending reductions were made in the Legislature and state Constitutional Officers’ agency budgets.

The House budget bill now goes to the Senate for further consideration.

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