House passes bill to exempt Social Security benefits from income tax; goes to Senate

CHARLESTON — The House approved its bill on Friday to exempt Social Security retirement benefits from state income tax and sent it to the Senate.

HB 2001 gives retirees age 65 and up, or taxpayers of any age permanently and totally disabled two options: exclude Social Security benefits from taxation or exclude $8,000 of income from taxation — whichever produces the greatest savings.

Delegate John Williams addresses the bill.

The vote was 96-1. Delegate John Doyle, D-Jefferson, was the sole holdout. He said he’s 76. “I’d love to have the money but I don’t think the state can do without it.”

The governor’s budget shows the impact on state revenue will be about $50 million.

Delegate Larry Rowe, D-Kanawha, supported the bill but noted that the tax cut won’t much help lower income retirees.

Delegate Rodney Pyles supports the bill.

That information comes from a couple of sources. The Department of Revenue told legislators earlier this year that only 22 percent of Social Security benefits in the state are taxed.

And the West Virginia Center for Budget & Policy released a chart early in the session, using figures from the Institute on Taxation and Economic Policy, that shows retirees in the $21,000 to $36,000 income range will see a $35 tax cut; $36,000 to $56,000, a $161 cut, and $56,000 to $91,000, a $623 cut.

Incomes below $21,000 already pay no tax on benefits.

Rowe said that along with passing the bill, the state needs to so things to help the poorer retirees make ends meet so they won’t be left behind.

Other supporters of both parties praised the bill without conditions. Delegate Evan Hansen, D-Monongalia, said, “When we pass this bill, we’ll finally be doing right for our seniors.”

Mon County Democrat colleague Rodney Pyles said his first bill back in 2017 was to exempt Social Security from Taxation. And Mon Democrat John Williams said, “It’s high time we stop balancing our budget on the backs of our senior citizens.”

Zack Maynard, R-Lincoln, said more and more grandparents in his county are raising their grandkids and this tax cut will help them support the kids.

This bill will apply to this tax year, 2019. It is largely the same as the governor’s bill, SB 342, that is sitting in Senate Finance.

Other bills

The House passed SB 27 86-11. It removes the current law restricting Keno lottery games to bars and clubs, opening it up to be offered by any licensed lottery retailer. A 2017 Lottery Commission fiscal note for a previous version of this bill estimated $3 million in new Keno sales, with a net of $592,300 after deducting winnings, retailer commissions and fees. All 11 votes against were Republican. All local delegates voted for it. It returns to the Senate for amendment concurrence.

HB 2524 passed 97-0. It allows a pharmacist to convert a 30-day prescription to a 60- or 90-day prescription if the prescription permits refills and meets other conditions. It goes to the Senate.

So does HB 2679, which allows the state to issue an ID card without a photo to a person whose religious tenets or beliefs forbid photos. It also passed 97-0.

Home rule bill

After several days of delay for pending amendments, the Senate passed the home rule bill, SB 4. It makes the Home Rule Pilot Program permanent.

Two amendments were adopted. One, by Sen. Corey Palumbo, D-Kanawha, strikes a provision that would have allowed voters to call for a referendum within 45 days of any home rule law passed by a city council.

The other, with bipartisan sponsors, strikes a provision requiring voters to approve any bond sales that would use the local sales tax for revenue.

A third amendment, by Sen. Mike Romano, D-Harrison, failed along party lines, 15-18. It would have stricken a line specifying that home rule cities can pass no laws contrary to state right to work law. This had been a point of contention, with Democrats saying it’s unnecessary and Republicans saying it will help avoid litigation by making the prohibition clear.

A similar amendment in the House version, HB 2728, led to the tabling of that one in House Government Organization.

SB 4 passed 30-3. All local senators voted for it. It now crosses over to the House.

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