Gov. Justice signs sweeping tax cut legislation into law

CHARLESTON, W.Va. (WTAP) - Governor Jim Justice today signed into law what he calls the largest tax cut in West Virginia history.

House Bill 2526 will reduce personal income tax for all West Virginians, provide property tax rebates for business owners and install trigger conditions for other tax cuts in the future that would eventually eliminate income tax in the state all together.

During an energetic signing ceremony on March 7, the governor was joined by state legislators on the stage of the State Culture Center Theater in Charleston. Gov. Justice spoke proudly of the cooperation between his office and the two houses of the legislature that made the passage and signing of House Bill 2526 possible. “It’s so much better, in life and anything we do, when we do it as a team,” Gov. Justice said. “When absolutely everybody wins, whether it be the house, the senate, the governor’s office, all the great people of the state of West Virginia. When everybody’s on a team and everybody wins, it’s a great, great, great day in this state.”

Despite the broad support for the tax cut within the governor’s office and the legislature, others have raised concerns about the potential cost of the legislation.

Kelly Allen, director of the West Virginia Center on Budget and Policy, a nonprofit research organization, said she is concerned about the monetary cost of the legislation, both now and in the future. “We’re concerned about the initial $800 million price tag, but we’re also concerned about those future automatic triggers that could handcuff future legislatures who need to be spending money on public services and schools and healthcare and infrastructure,” Allen said.

Allen said the proposed tax cut will overwhelming benefit the wealthiest households in the state. “The average household will see something like a couple hundred bucks a year, but that really varies based on income,” she said. “The lowest income households will get 11, 12 bucks a year, whereas the top 1% of households are going to get upwards of $10,000 a year.”

Allen said that prior tax cuts in West Virginia have hurt the state’s budget. “In the mid 2000′s, we cut the corporate net income tax and the business franchise tax,” Allen. “Over the period that followed, we had the worst job growth of any state in the country, and we saw significant hits to our budget that resulted in reductions in higher education investments and infrastructure and public health and other things.”

As the governor and legislators champion this tax cut, SB 268, which would raise insurance premiums for state employees using PEIA, sits on the governor’s desk, having passed both houses earlier this month. House Deputy Speaker Matt Rohrbach has stated these changes to PEIA are necessary to “stabilize the system and keep it viable for the 230,000 West Virginians who rely on it.”

Yet, Kelly Allen pointed out, the rising costs of PEIA that the premium increases will help pay for are a fraction of the nearly $800,000 cost of the tax cut. “Those PEIA cost increases cost about a tenth of what the tax cuts costs, so we are actively making a policy choice that these tax cuts are coming at the cost of the state further investing in PEIA or public employee raises or a number of other really good bills that have been in the legislature this year and have stalled.”

What the long term impact of House Bill 2536 being signed into law will be remains to be seen.

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