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Approves second resource officer at schools
During their recent meeting, the Grant County Commission heard an update about the ongoing efforts to expand high speed internet throughout the county. Last year, the county received a grant through the Grant County Development Authority to conduct a Broadband Feasibility Study to highlight under-served areas and present options for a multi-phase plan to address the issue.
West Virginia House of Representatives Delegate John Paul Hott attended the meeting to update them on the happenings in the West Virginia legislature. Hott explained that, as of the last election, the Republican party has a super-majority in the state, meaning elected officials in the party hold the majority in both the house and the state senate as well as the governorship.
Hott also introduced the commission via phone to fellow delegate Daniel Linville. Linville serves as the representative for Cabell and Lincoln counties. He is also the chairperson of the Committee on Technology and Infrastructure.
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Parkers News & Sentinel
Gov. Jim Justice went into overdrive Thursday to gain public support for his plans to reduce the personal income tax rate and raise other taxes as state and national business groups push back against the proposals.
During an impromptu virtual town hall Thursday evening with barely seven hours’ notice, Justice accused lobbyists for businesses interests of trying to sabotage his tax plan.
“You’re going to see an orchestrated effort in the days ahead … by those who are out there who are absolutely probably thinking in my mind ‘pennywise and pound poor.’ They’re good people, but they’re thinking selfishly,” he said.
“You have lobbyists circling around everywhere because no one wants to give a little bit,” Justice continued. “We do not want to be run by the lobbyists … are the lobbyists and are the money going to continue to run all of us all the time? It’s a swamp completely overtaking us all.”
The West Virginia Business and Industry Council, a special interest group consisting of 50 trade associations and businesses, wrote a letter to lawmakers Wednesday asking them to carefully consider the effect of Justice’s tax plans on businesses throughout the state.
“We applaud Governor Justice’s initiative to do all he can to make West Virginia the most attractive state in the nation to live and work, but our members have concerns over the impact this income tax plan will have on every West Virginian and West Virginia business,” wrote Mike Clowser, chairman of BIC.
“We all agree the elimination of the personal income tax is a laudable goal, but BIC members believe there needs to be study, debate, and public input in order to develop a comprehensive tax restructuring plan,” Clowser continued.
“There’s no mention in this at all that all West Virginians will end up cash-positive,” Justice said in response to the BIC letter. “I wouldn’t have done it any other way. There’s no way on Earth I would have let the low-income wage earners carry the burden of this.”
House Bill 2027 and Senate Bill 600, the governor’s tax plan, was introduced Tuesday in the House of Delegates and state Senate. Under Justice’s proposal, personal income tax rates would be cut by 60 percent starting in July for fiscal year 2022. The tax cut would affect income earned from wages and salaries, pensions, annuities and IRAs, Social Security, and unemployment.
However, the personal income tax cut would exclude income from Schedule C business profits; Schedule E rents, royalties, and pass-through entity profits; Schedule D capital gains; Schedule F farm income; supplemental gains and losses, taxable interest income, dividend income, and miscellaneous income.
According to Ryan Maness, a senior policy analyst and tax counsel for government relations association MultiState, wrote in a blog post that only cutting personal income tax rates on some forms of income and not all amounts to a “phantom cut.”
“Assuming that this definition of ‘business personal income’ encompasses the entirety of state business’ liability under this tax, West Virginia employers would receive no tax benefit at all from this proposal,” Maness wrote. “In other words, it is likely that the $100 million personal income tax cut identified above is a phantom cut that will not be effectuated.”
“The proposal reduces the personal income tax obligation of an individual wage earner based on their income level but does nothing to benefit a business,” Clowser agreed. “The majority of West Virginia businesses are operated as sole proprietors, limited liability companies, limited partnerships, or general partnerships. As we understand the proposed legislation, owners of these businesses will see no benefit from the plan.”
In response, Justice said eliminating those additional personal income taxes that affect business owners is a long-term goal.
“We’re going to eliminate taxes on our businesses … as well,” Justice said. “We’re on a pathway right here that could absolutely substantially benefit and draw all kinds of businesses to West Virginia.”
Justice’s tax proposal also includes several tax increases to offset the $1.088 billion tax reduction from the personal income tax cut and a $52 million tax rebate for families making less than $35,000 per year.
Tax increases include $902.6 million in proposed tax increases in the consumer sales and use tax; a tiered severance tax for fossil fuels; a tax on certain luxury goods; and increased taxes on cigarettes, tobacco products, e-cigarettes, beer, wine, liquor, and soda. Justice would also remove sales tax exemptions from professional services, such as legal services, accountants, computer hardware and software, and other categories.
“Combined with the cost of the tax rate increase, businesses would be on the hook for at least $330 million in new taxes from the sales tax provisions alone,” Maness wrote. “This would be mitigated somewhat if businesses are able to subtract out the income tax cut–leaving a new additional liability of $230 million–but the plain language of the legislation suggests that the true tax increase which would fall on state employers is $330 million.”
Jared Walczak, the vice president of state projects at the Tax Foundation’s Center for State Tax Policy, had posted on Twitter last week his concerns about Justice’s plan.
“At first glance, this reduces liability for many (West Virginian) taxpayers, but shifts much of the burden onto businesses,” Walczak said. “That complicates the growth expectations … “
Even with additional savings and efficacies, Justice’s plan still leaves a gap between $185.1 million and $90 million if assumptions in the plan — such as cutting the budget by $25 million, $10 million in estimated savings from elimination state jobs through retirement and attrition, and $60 million in estimated tax revenue growth – are accurate.
“The proposed legislation leaves a funding gap,” Clowser wrote. “The Legislature would need to identify significant cuts to state services or programs to make up the difference.”
Personal income tax revenue accounted for 43 percent of $4.5 billion in tax revenue collected for the state’s general revenue fund.
In the first eight months of the current fiscal year as of February, the state collected $1.5 billion in personal income tax, which was 47 percent of the $3.1 billion collected in total taxes for the general revenue fund year-to-date.