CHARLESTON, W.Va. (WSAZ) – West Virginia Gov. Jim Justice and lawmakers reached a compromise Monday on a tax cut for families in West Virginia.
The agreement will reduce the state’s personal income tax rate by 2 percent, down from 5 percent as Justice initially proposed.
Delegate Dean Jeffries, R-Kanawha, serves on the House Finance Committee. He is among those much more comfortable with a 2% cut.
“We all want to reduce taxes,” he told WSAZ. “I’d love to cut taxes 10, 15 percent, but in order to do that we have to have the money to make that happen. To do what without the funding, would be irresponsible and could endanger this state’s finances.”
The compromise winning broad support Monday with passage by the West Virginia Senate and the House Finance Committee.
If it wins approval from the full House, the 2-percent cut would be on top of a 4-percent cut already slated to hit your paycheck in January 2025 and a 21.25-percent cut received in 2023.
Those cuts were passed as part of a package that reduces the state’s income tax with the speed of economic growth.
House Finance Chairman Vernon Criss, R-Wood, supported a larger tax cut, but said the compromise will continue a crucial message that West Virginia is on the move.
“Look at the overall situation,” he told WSAZ. “Yeah, we’re doing small steps, but that is how we are able to grow our economy and still be able to maintain the cuts that we’ve done.”
The Justice administration said it will pay for the additional 2 percent with a mix of expired debt and spending cuts, particularly savings from the reorganization of the state’s Department of Health and Human Resources.
Senate Finance Chair Eric Tarr, an early critic of Justice’s initial proposal, now supports 2 percent and rejects an argument that it hamstrings future lawmakers and the state’s next governor.
“Either you reduce taxes because your economic growth exceeds inflation, or you reduce taxes because you find opportunities to reduce spending, and so that opportunity for reducing spending is there in order to cut taxes, so I think it’s doing it exactly as we designed,” Tarr said during Monday’s floor debate.
“In related news, the House passed a proposed child care tax credit. It will allow West Virginia families to claim a portion of what they pay for child care as a credit against their state income tax, very similar to what is already allowed by the federal government.
The child care tax credit still awaits action in the State Senate.
The House of Delegates could take action on the larger tax cut as early as Tuesday. The full House reconvenes at 11 a.m.
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