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Finance chairman says tax plan is too little, the wrong approach and lacks communication

Gov. Jim Justice wants a special session to cut personal income taxes by about 10 percent, but the Senate Finance chairman cites three problems: too little, the wrong tax and too little communication.

“The governor has been a big thinker for the state, and so when he comes out with ideas, usually they’re really big ideas. So when he’s talking about tax cuts, I would normally be excited, thinking he’s going to come out with a big plan. And this wasn’t a big plan,” Senate Finance Chairman Eric Tarr, R-Putnam, said last week on “580 Live” on WCHS Radio.

“I really wish the governor would have come and talked to the Senate, anybody in the Senate, and the Senate leadership especially — before he goes in and says he’s going to call a special session on a very small tax cut.”

Tarr said the governor’s proposal has come “when we’re in a position in West Virginia like we’ve never had before because of a whole lot of things coming together at once,” describing a budget year that came in more than a billion dollars above estimates. Meanwhile, Senate leaders have been working toward personal property tax cuts of more than $500 million.

“So if we’re really going to take advantage of this situation in time, like we probably have not seen in our lifetime and may not see again once we get through this, we go through and we do tax cut policies that are meaningful for the people of West Virginia.

“A 10 percent tax cut doesn’t move people. It doesn’t move capital. It’s about three hundred bucks a year on average for the people. Now $300 is a bunch of money for some people. But it’s nothing like the impact that eliminating the personal property tax can do.”

Justice has been aiming for a special session aligned with regularly-scheduled legislative interim meetings starting in a little more than a week. State lawmakers have tended to be wary of open-ended special sessions because the public is sensitive to the daily cost of meeting.

Comments like Tarr’s show there is a big gap between the governor’s vision and what some legislative leaders prefer.

“When the governor comes in and says ‘Let’s do a 10 percent income tax cut,’ I’m all about income tax cuts,” Tarr said. “But if you’re going to do it, let’s do something that moves money and moves people and keeps families in West Virginia. And the personal property tax cut makes West Virginia so competitive to bring people here.”

Gov. Jim Justice

During a briefing last week, Justice reiterated that he believes the income tax cut is appropriate policy, whether lawmakers do or not.

“At the end of the day, if the decision is the Senate or the House, they don’t want to do this — all I can say is just this: I would say ‘Missed a great opportunity. I’m not going to worry about it. I can absolutely tell you, you can only take the horse to water; you can’t make them drink.’

“Really and truly, their answer then is going to be to the public, not to me. I’m not going to be concerned. I’m going to hate it for our people. This is what we should do. We should move on this very, very quickly.”

Robert Karnes

State Senator Robert Karnes, who led a select committee exploring tax changes in 2017, said last week that cutting the income tax would be a more strategic economic move than property tax cuts, although he generally supports both. During last year’s regular session, Karnes made near-daily speeches supporting income tax cuts.

“I think there’s broad support for both tax reductions in the caucus, and I think it’s probably more mixed as to who thinks which should go first,” Karnes, R-Randolph, said last week on MetroNews’ “Talkline.”

Stephen Baldwin

Senate Minority Leader Stephen Baldwin noted that the Democratic caucus this year has proposed cuts to the state sales tax as well as a gas tax holiday. He expressed frustration that nothing has resulted.

“With inflation skyrocketing to a 40-year high and rising at 9.1 percent last month alone, West Virginians need immediate tax relief,” said Baldwin, D-Greenbrier.

“Every single proposal has been rejected by our Republican colleagues. What are they waiting for? People need help now. Why are they wasting time talking about potential income or property tax relief years down the road? People need help now. We are open to all ideas that will provide immediate relief for the people, and we stand ready to work with anyone who’s willing to get the job done.”

Delegate John Williams, D-Monongalia, said he was surprised the governor brought the income tax issue back up again, after previous years’ consideration has not resulted in passage. Williams is a member of the House Finance Committee.

“I don’t know how much of an appetite there is for it. I think there are discussions happening, but we’ll see,” Williams said on “Talk of the Town” on WAJR Radio.

He said the money could be used in better ways.

“My concern is that if you go in and just kind of do a willy-nilly income tax cut, it’s not going to go directly to the pockets of people who need it the most,” Williams said.

“There are other proposals out there that would be a similar cut in revenue for state government that would give every single child in West Virginia a tax credit, pay for a child’s day care. There are proposals out there that would target more to middle class or lower income folks, folks that are hurting the most. So before we come in and say ‘Let’s cut taxes” and everybody says ‘Oh yeah, let’s do that,’ let’s look at who’s actually getting the tax cut.”

Williams said he’s not sure what direction the special session will go.

“In terms of guessing what the final product will look like, I’m not sure,” he said.

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