Just before cutting a ribbon that said “taxes” and admiring a balloon drop, Gov. Jim Justice today said the state is on track for another automatic personal income tax cut of 3% to 4% — and the governor said he would call legislators in for a cut even beyond that.
“I want to call you back, and I want to challenge you to some way somehow try to do an additional 5 percent on the personal income tax,” Justice said, addressing lawmakers. “It’ll be tough, but there’s a way to do it, and all of us can work together and try to figure out how to do it and how to do it now.”
Justice said a special session to consider the additional tax cut would be in August or September. He said lawmakers also should consider policies bolstering child support at that time.
Justice made his remarks as the state concluded the fiscal year, and the governor noted that his final term is ending within a few months. Republican Patrick Morrisey and Democrat Steve Williams are competing to be sworn in as governor at the start of next year. Nevertheless, Justice said the state should take a chance on another tax cut.
“For God’s sakes a living, don’t be afraid. Don’t be afraid,” Justice said.
Justice’s remarks at the West Virginia Culture Center came as the conclusion to the most recent fiscal year resulted in revenue of $826 million above the estimate set annually by the governor.
The fiscal 2024 estimate had been $4.88 billion. The actual revenue collection wound up being $5.7 billion through June.
By the same time in 2023, general revenue collections totaled $6.48 billion.
The difference came as the state instituted a 21.25% personal income tax cut this year in a package that included further automatic reductions under certain economic conditions.
The formula for the tax trigger would measure general revenue collections in a fiscal year minus severance collections compared to 2019 as a base year. If collections are ahead of the base year, that would activate the trigger.
The state has another financial pressure too. A personal property tax rebate on people’s vehicles is expected to amount to $200 million.
Kelly Allen, executive director of the progressive West Virginia Center on Budget & Policy think tank, said another income tax cut wouldn’t mean much to most West Virginians — but another round of lost state revenue would.
“Even in the first year, we can see how deeply flawed and unworkable the tax cut triggers are. The personal income tax cuts triggered as described by Governor Justice today will result in about 85 cents per week for the average West Virginia household—too small for most families to even notice. Meanwhile the starvation of the state budget that the tax cut trigger uncertainty has caused, visible in our underfunded child care system, health care funding, and schools, has impacted us all,” Allen said.
“For the governor to propose additional tax cuts when child care centers are closing, public schools are losing support staff, and we face the worst child welfare crisis in the country is unthinkable.”
Justice made what the administration described as an “historic announcement” at the state Culture Center. Much of the event was a celebration of the administration’s policies over the course of Justice’s two terms, recognition of the results at the end of the fiscal year, an announcement of the amount of the anticipated trigger and the governor’s urging of more. The event also coincided with removal of a 1 percent tax on beverages 71 years after its implementation.
“West Virginia’s really doin’ it, and we’re really, really, really proud — all of us, and we all should be,” Justice said.
The administration’s acting revenue secretary, Larry Pack, made opening remarks. Prior to that, Pack appeared on MetroNews’ “Talkline” and described meeting financial goals.
He said the state’s financial performance the past year “shows that West Virginia’s growing, we have more taxpayers working, and they’re paying more taxes. So just a really, really strong year there.”
Before the governor’s remarks, Pack said officials would have a variety of options with year-end surplus.
“Any dollars that come into state coffers, there’s three things we can do with it: We can spend it, we can save it, we can give it back,” Pack said. “Those deliberations will be happening now that we have our real numbers with the Legislature, and we’ll address those issues.”